Saturday, January 7, 2012

Ilargi: In a nice coincidence, while Nicole Foss (Stoneleigh) wrote about decentralization a few days ago in The Storm Surge of Decentralization, today Ashvin Pandurangi, independently from Nicole, also focuses on that theme, albeit from a completely different angle.

Perhaps even from the 180 degree opposite angle: it's precisely because the 1% push so hard for centralization that it's crucial for the 99% to push back and decentralize. And it's precisely because our economic models exist only by the grace of growth unchecked that we need to get out and take a step back, or that growth will surely eat us alive.

It's exactly like Arthur Miller's Willy Loman, as quoted by Ashvin, says: "After all the highways, and the trains, and the appointments, and the years, you end up worth more dead than alive".

That's what societies founded on perpetual growth and its inevitable companion, centralization, end up doing to 99% of their citizens: they degrade and pervert their dignity, their lives, and their value. In that sense, decentralization marks the beginning of a return to our true human potential, since it restores the values and dignity that make our lives worth living.

Unfortunately, today most of the 99% will not recognize this, and if they did it would scare them senseless, so they help push the growth paradigm forward even as it's gnawing at their bones. Life as a cog in a machine is the only life they've ever known. What else could there be? When you're told a hundred times a day that you live in the land of the free, what's not to believe?

It's high time we begin to understand to what extent the interests of the politicians and bankers and CEOs that we allow to make our decisions for us (read: against us), differ from our own. But since our education systems and media have denied the very existence of any such difference all of our lives, this understanding will be very hard to come by for 99% of the 99%.

"After all the highways, and the trains, and the appointments, and the years, you end up worth more dead than alive."-Arthur Miller, Death of a Salesman

Ashvin Pandurangi: The word of the last few centuries is centralize. That's what "institutions" do, whether they are technically financial, political, educational, "corrective", religious or medical; private or public. Those labels are largely irrelevant when you want to understand the fundamental nature of an institution. They are simply structured hierarchies of distributed power that strive to grow larger and more influential with each passing day.

Perhaps they are trying to influence the outcome of an election, the direction of foreign policy, the prices of a market, the focus of scientific research or the psychology of society's youth, but, rest assured, they are trying very hard to influence something. Some institutions are much more influential than others, and typically these are the most self-serving.

These institutions are also inherently self-limiting structures; fractal constructs that are self-similar and limiting at every scale, right up to that of our global economy and civilization. They never freely compete with each other to reach some generally productive equilibrium, but rather coerce their respective sectors to become more and more dependent on their functions over time.

By exercising more power and influence in a given field, they crowd out both their own opportunities for further expansion and the opportunity of other institutions to enter the sector and grow. The world's "too big to fail" financial institutions have clearly demonstrated how a few giant players can grow so large to threaten the collapse of the entire global economy when they can no longer grow.

The current crises of capitalism also demonstrate a rapidly progressing, yet age old trend which reveals the strategy of almost all of society's "industries" and their respective institutions - boundless aggregation. One of the major pieces of propaganda in today's financial world is that increasing mergers & acquisitions ("M&A") activity is a sign of growth and health in the economy.

It is, in reality, a sign of desperation and a harbinger of decreased resilience (a.k.a. "impending doom"), and that becomes quite clear when we consider the type of M&A activity that has been occurring over the last few years. Relatively large companies are suddenly finding themselves in a position of pure desperation, where they must either combine with other companies through some legal process or die.

I recently met a guy who was finishing his second year in Wharton Business School at the University of Pennsylvania, and had an internship position with an unnamed investment banking firm. He told me that his responsibilities at the firm were related to conducting "fairness opinions" for corporate clients that were involved in merger deals and wanted to insulate themselves from shareholder liability (if the banker says it’s a fair deal, then it must be).

He also told me that M&A activity had unsurprisingly slowed down immensely since the onset of the "recession", in terms of total valuation of deals, but that it was markedly off its lows in 2009 and there were still many companies pursuing deals because they simply have no other options to remain viable. Many of these deals are increasingly conducted at the international scale, since domestic markets have already been picked clean to the bone.

These are mid-sized companies in manufacturing, IT, telecommunications, retail or services with a depressed consumer base, relatively high debt to equity ratios and very little ability to access the credit markets and obtain affordable financing; the institutions that have struggled for years to become "successful" business operations, but are now nothing more than basement bargains for much larger institutions.

They are the last remaining dust particles of competition within those industries, waiting to be vacuumed up as soon as the slightest window of opportunity presents itself. These opportunities are pervasive in the current volatile environment, where share prices of public companies are frequently pummeled down in tandem and the markets remain in an indefinite state of uncertainty due to opaque asset valuations and government policy.

As a targeted company's share price continuously comes under pressure, it becomes more vulnerable to "hostile takeovers", since it is cheaper and the larger acquiring company holds significantly more leverage, literally and figuratively, with the company's shareholders (which typically include its executives and directors). The latter must hastily decide whether to remain independent and hope for a miraculous recovery, or give in to a proposed merger.

As soon as the deal is announced and before it is even finalized, share prices could stabilize and increase on expectations of "synergies" from centralization (a.k.a. "a temporary bailout"), but only after the small-time, passive investors have already jumped ship. Indeed, it is no coincidence that U.S. M&A activity picked up in 2009-10, right in time for the Fed's QE asset purchases and the stock market rally. Companies who have remained off of public exchanges are by no means immune to this scourge of centralization, either.

That fact has become especially true in recent years, when "private equity groups" re-surged as a popular and relatively discreet vehicle for institutional investors (such as pension funds) and extremely wealthy individuals to conduct leveraged buyouts of various companies around the world. Ironically, the private "equity" group typically uses substantially less than 50% of investor equity in the buyout, and finances most of the deal through debt.

"The 2011 total represents a 58% increase over the same period in 2008, inclusive of a 52% increase in private equity-sponsored transactions. About half of the deal volume is for U.S. targets (up 36%) and around one-quarter is for European targets (up more than 100%), while both emerging market and cross-border deals experienced declines.

Energy and financials were the leading sectors, although materials experienced the largest year-over-year growth (see chart). Financials were sparked by the $59 billion restructuring for AIG -- a deal whose inclusion here is questionable -- while energy got a boost from Duke Energy agreeing to buy Progress Energy for $26 billion. Those are the first and third-largest so far in 2011, sandwiched around AT&T buying T-Mobile for $39 billion.

In a separate report, S&P Leveraged Commentary & Data reports that leverage multiples for large deals have climbed half a turn to 5.2x -- lower than the heights of 2007, but besting 2008, 2009 or 2010.

Since private equity funds are illiquid investment vehicles that require long-term commitments, much of the capital invested during the boom of the mid-2000s is still in the process of being deployed, despite the horrendous macro-economic situation. Small to mid-sized companies can neither run nor hide from the slithering tentacles of leveraged capital seeking returns, which have only increased in length since 2010.

It should be pointed out, though, that the massive $39 billion deal between AT&T and T-Mobile has recently fallen apart, costing the former $4 billion simply to walk away from the deal. Even the highly-conflicted Federal Communications Commission and Department of Justice couldn’t ignore how damaging this monopolistic merger activity would be to the telecommunications industry, and therefore they decided to block the deal. [1]. That’s the official story, anyway.

Now that we have reached the end of 2011 and the European sovereign debt crisis has reached a crescendo from which there is no turning back, M&A volumes are once again being pummeled down as they were in 2008. Once again, though, we are talking about total valuation of deals and not necessarily the number of mergers and acquisitions that will be taking place in 2012.

Helen Thomas and Anousha Sakoui of the Financial Times report on the opportunities for further centralization of corporate assets:

"Fourth-quarter M&A volumes fell 32 percent to $375.3 billion from the previous three months, led by a 41 per cent decline in Europe. The drop, combined with a pullback in equity issuance amid turbulent markets, contributed to an 8 per cent fall in investment banking fees to $72.6bn for 2011, against 2010.

In Europe, fees totalled only $2.57 billion across all products, the worst quarter since records began at data-provider Thomson Reuters in 2000. "Volumes in equity and debt capital markets and M&A in 2012 are likely to be challenged, but with a crisis comes opportunity," said Manuel Falco, co-head of European investment banking at Citigroup.

"There will be huge opportunities in the public sector to acquire state-owned assets, and companies will need to issue equity [for] defensive [purposes]. The crisis presents the best buying opportunity for acquiring a company in Europe."

Should we be surprised that the wholesale destruction of European economies is described as presenting the "best buying opportunities" in history? Perhaps we should call them the "best opportunities for institutional cannibalism in all of history". This centralization process does not only take the form of "voluntary" mergers, especially in present times, but more often results from bankruptcy filings that force companies to liquidate or restructure their assets.

There have been quite a few examples of this dynamic in the world of high-stakes international finance over recent years, and there are many more to come. While the number of actual US "bank failures" in 2011 reached a 3-year low of 90, perhaps due in part to the pickup in financial merger activity noted above, the number of "problem banks" listed by the FDIC has remained pretty much constant over this same time period.

The largest, most recent victim of the global debt crisis was MF Global, a large broker-dealer, which was bankrupted and is in the process of being liquidated. Many of MF Global’s European sovereign debt assets were already sold off to investors such as George Soros and JP Morgan at huge discounts (5%) to fair market value. [2]. There are also claims that MF Global fraudulently filed Chapter 7 as a securities broker, rather than a commodities broker, to give major creditors access to the company’s cash before its clients.

So as the lower and upper "middle class" citizenry of the developed world are being rapidly digested in the acidic bowels of financial capitalism, the "big, yet not quite big enough" institutions are systematically having their "assets" aggregated on the books of a few supranational giants at not only cheap prices, but through illegal transfers and illegally discounted prices. As the weak wither and die, the strong draw lots to see who among them will be devoured first (JPM and Goldman always draw the biggest straw).

Whether it's Bear Stearns and Lehman handed over to Barclays and JP Morgan for a pittance, a large telecommunications provider targeted by AT&T, a few executive agencies rolled up into the Federal Reserve via Dodd-Frank or MF Global’s assets auctioned off at discounts to Soros and JPM, there is very little choice in the matter for either side of the deal. Either you submit to the "mercy" of centralization, or you are shoved out of the "market" and lose every speck of institutional value you had left.

Make no mistake, these are not rational economic actors acting in the best interests of their stakeholders and maximizing long-term institutional value, but desperate, irrational and short-sighted actors coerced into deals for a quick payoff. The low-level employees and mid-level managers of the acquired institutions usually find themselves joining a line in the local unemployment office or perhaps attending a "networking seminar", designed to create the illusion that they remain important to the system.

Meanwhile, there are millions of new, starry-eyed faces that have been spewed out of various "educational" institutions, wading tens of thousands deep in debt, who are now "willing" to work longer hours for much less salary and fewer benefits. Your degree, work experience and interpersonal skills mean next to nothing, because there is simply no more room for your specialized "credentials" in the institutional system.

As the unsurprisingly misleading chart from the BLS shows below, "mass layoff events" (at least 50 initial claims for UI filed against an institution in a 5-week period) have hovered around 1500/month for the last two years. [3]. Initial unemployment claims are generally revised upwards after initial publication and still remain well above what is necessary to actually improve the unemployment situation. Expect these mass layoffs to only get worse in 2012.

As noted above, much of this shake-up is occurring in the financial industry right now, where large banks are shedding assets like skin cells to raise capital, and of course this process starts with the only asset that can’t afford to be shed, their low to mid-level employees. The graph constructed below only captures those banks which have announced mass layoffs over the next year or so, and both the number of banks and number of planned layoffs are sure to increase as the year progresses. It is also important to remember many of these banks already conducted mass layoffs in the shake-ups and restructurings of 2008-09.

The only thing that matters now is how much of an institutional slave you can force yourself to be, which means lower wages for more hours and no benefits; unless, of course, you can count yourself among the entrenched class of the top 1-5%. These corporate directors, high-level officers and government officials, who bled their respective institutions dry, will typically secure positions in an acquiring institution. That, or they will secure a similar position at another large institution somewhere in our global society, only a private jet ride and a gated complex away.

At the very least, they can retire with a healthy severance package and/or pension, start up a "non-profit" organization and invariably use it as a front for a corporate interest lobby. Most of the small and mid-sized clients/customers in these industries are also squeezed like the small-fry employees, because they are not benefiting from "economies of scale", but instead are paying for the privilege to access the centralized market. Nowhere is this fact more evident than in the financial industry, where individual and small business debtors are charged ever-more interest and have to put up ever-more collateral to obtain credit and/or rollover obligations.

While the effect of the institutional squeeze is to generally depress wages and asset/consumer prices, the effect of that depression is to eliminate choices and make everything much less affordable. Meanwhile, the unfortunate (and relatively large) clients of failing institutions such as MF Global have their funds outright stolen from them and transferred to large institutional creditors who were engaged in "repo" lending and derivative trades with the now bankrupt entity.

Welcome to the world of exponential centralization, where 99% of the population reeks of desperation and the other 1% personifies destruction in the form of "synergistic" acquisitions. The latter will inject a few more drops of lifeblood into the heart of ponzi-aggregation capitalism, but it too is rapidly losing its ability to create the illusion of economic stability and growth. That driving force of capitalism, capital, has become much too scarce for the centralization ponzi to continue outside of direct totalitarian force.

The largest institutions are clearly the least flexible to "new and unexpected" conditions that will arise, and therefore are the most acutely vulnerable to "black swans" and systemic shocks in the near-term. When, not if, some politician, bureaucrat or banker takes one wrong step on the tightropes stretching across every line of latitude from the North to South Pole, look out below. Despite what we are told, nothing material of man is immortal and we only get one chance to survive this world. Our global institutions already blew theirs many years ago, and most are now worth much more dead than alive.

Really, what I have to say has been well expressed here in alternative parlance, but the entire push to get people off their land and into cities worldwide has to do with hypothecating the value of their labor, rents, debts, etc.

It has nothing to do with improving the quality of life. Never did.

But my how Americans in particular have been suckered into playing the role of fiscal missionaries of the world through their investments - guardians of the way of death by debt. And how bitterly it will come back to bite perhaps the most centralized society that has ever existed.

Someone freely living as a "pastoralist" (http://en.wikipedia.org/wiki/Pastoralism) can't be quantified on a spreadsheet. So the capitalist goon squads and armies keep ruining agriculture, driving the people off the land any way they can, and herd everyone into cities, to make more spreadsheet widgets out of everyone and every aspect of daily life.

And at the end of it all, it doesn't matter to them whether all that personal debt is repaid. In fact it works to their advantage if people do not repay. That way, they can hypothecate a lot of future penalties and interest on it.

We learned this at a Mexico Costco. They gave out $500 credit to anything with a pulse that could sign an X. They wedged TVs out the door, roped stuff onto cars, into trunks, loads wobbling out of the parking lot. We wondered, hey, wait, Mexico has no recent credit card history, and these people are certainly going to abuse this. That's when the lights came on. The issuers of credit don't want them to pay it back soon ("12 months interest-free!"). They were betting that they would not pay it back, bundling all that lousy debt up into other instruments, and upping its value by presuming that the debt would soon include abundant late fees. The original creditors couldn't care less, probably they sold the debt to someone else down the credit food chain a half hour after each agreement was signed. And bingo, now repo is the fastest-growing business in Mexico.

I know longtime readers probably read this before from me in more elaborate words. But it illustrates the fact that the entire push towards centralization is just a nudge towards what, debtors' camps.

Which is a long-winded thank you to Ash for this essay and his aversion to "growth" schemes of capitalism.

The capitalists do little more than lie in wait for blood.

I am with you that people dedicating their lives to working these kinds of scams - people not long ago celebrated as respectable on Wall Street - let's just say that leaches and every parasitic or pathogenic form of biology has more integrity than humans who wreak this upon other humans.

I have explicitly suggested that we socialize the phrase "profligacies of scale" to replace the tired and obsolete "economies of scale", because in truth the latter meme has run its course and should be retired.

I believe JMG even used it as a title for one of his sermons last year...

I must have been posting a comment just as this essay was going up. See the last comment on the Decentralize post.

I've been involved with Occupy Oakland and don't see it being co-opted or fizzling out. The spring should see it sprouting up all over the country. I'm beginning to envision Occupy as more like bulbs and roots that will rise again, or maybe wack-a-mole where it pops up again and again.

The networking and horizontal fellowship of Occupy are setting up a localization structure that needn't continually grow just interconnect.

The defense from really big money is being small and without money, when the big cats are on the prowl.I just ate some lovely organic local Kale, grown by a couple of artists and their farming-hippy friends on 2 empty lots in my neighborhood, less than 2 acres total. They don't need to own the land. Mobile farming!

I just saw your comment from the previous post. I think ZH does honest reporting in most cases. I think the information I presented is primarily related to gold and silver. ZH is probably the best there is as far as "breaking news" related to markets and they have many good guest posts. That said, I also think the information tarnishes the reputation of the Durdens.

Thank you for that NYT article. I have been observing that sort of thing for an awfully long time and wondering when the debts would no longer be on-sellable. Perhaps we are now at that point.

It seems to me that once intermediaries get between people and their savings or pensions, the plot is lost. The only way to stop this sort of thing from going on is to have only voting capital (i.e. equity) and to consign debt (i.e. bonds) to the dustbin of history. People should be obliged to look after their own money.

John Day, the externalities of the actions of "really big money" make long-term defense (think your children) impossible. The true defense against really big money is in the numbers of the rest of us who could decide that using money isn't in our individual or collective best interests and therefore could decide to end its use (as distinct from being/living without money as individuals or small groups.)

If we go beyond Ilargi's and Ashvin's descriptions and ask why those things are the way they are, the answer is almost entirely "because we--all of us--use money". In a world that stopped using money those negative circumstances and stresses would largely go away. The monetary/financial incentives--the "push"--for centralization (for example) would no longer exist.

NDAA s.1867 sec. 1245 -Imposition of sanctions with respect to the financial sector of Iran.

"(b) DESIGNATION OF FINANCIAL SECTOR OF IRAN AS OF PRIMARY MONEY LAUNDERING CONCERN. —The financial sector of Iran, including the Central Bank of Iran, is designated as of primary money laundering concern for purposes of section 5318A of title 31, United States Code, because of the threat to government and financial institutions resulting from the illicit activities of the Government of Iran, including its pursuit of nuclear weapons, supportfor international terrorism, and efforts to deceive responsible financial institutions and evade sanctions."

"(1) IN GENERAL.—Except as specifically provided in this subsection, beginning on the date that is 60 days after the date of the enactment of this Act, the President—(A) shall prohibit the opening or maintaining in the United States of a correspondent account or a payable-through account by a foreign financial institution that the President determines has knowingly conducted or facilitated any significant financial transaction with the Central Bank of Iran or another Iranian financial institution designated by the Secretary of the Treasury for the imposition of sanctions pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.);"

"(3) APPLICABILITY OF SANCTIONS WITH RESPECT TO FOREIGN CENTRAL BANKS. —Except as provided in paragraph (4), sanctions imposed under paragraph (1)(A) shall apply with respect to a foreign financial institution owned or controlled by the government of a foreign country, including a central bank of a foreign country, only insofar as it engages in a financial transaction for the sale or purchase of petroleum or petroleum products to or from Iranconducted or facilitated on or after that date that is 180 days after the date of the enactment of this Act."

"(4) APPLICABILITY OF SANCTIONS WITH RESPECT TO PETROLEUM TRANSACTIONS.—(B) DETERMINATION REQUIRED.—Not later than 90 days after the date of the enactment of the Act, and every 180 days thereafter, the President shall make a determination, based on the reports required by subparagraph (A), of whether the price and supply of petroleum and petroleum products produced in countries other than Iran is sufficient to permit purchasers of petroleum and petroleum products from Iran to reduce significantly in volume their purchases from Iran."

"(C) APPLICATION OF SANCTIONS.—Except as provided in subparagraph (D), sanctions imposed under paragraph (1)(A) shall apply with respect to a financial transaction conducted or facilitated by a foreign financial institution on or after the date that is 180 days after the date of the enactment of this Act for the purchase of petroleum or petroleum products from Iran if the President determines pursuant to subparagraph (B) that there is a sufficient supply of petroleum and petroleum products from countries other than Iran to permit a significant reduction in the volume of petroleum and petroleum products purchased from Iran by or through foreign financial institutions."

"(D) EXCEPTION. —Sanctions imposed pursuant to paragraph (1) shall not apply with respect to a foreign financial institution if the President determines and reports to Congress, not later than 90 days after the date on which the President makes the determination required by subparagraph (B), and every 180 days thereafter, that the country with primary jurisdiction over the foreign financial institution has significantly reduced its volume of crude oil purchases from Iran during the period beginning on the date on which the President submitted the last report with respect to the country under this subparagraph."

-If successfully implemented these sanctions may explode the price of oil, causing tens of millions of casualties by globally cascading logistical disruptions, even before war breaks out.

"The businesses that stormed corporate America in recent years under the banner of private equity were not always called private equity firms. In the 1980s, they were known as leveraged buyout shops. Their strategy is essentially unchanged, however: they try to buy undervalued companies, using mostly borrowed money, fix them up and sell them for a fast profit."

The sanctions that super gravity posted could well be considered a act of war by the affected parties.Between the financial worlds death march,and various groups wanting "the war to end all wars",2012 is set to be a very weird year.

The more I pay attention, The more I dislike what I see.

The thrust of Stoneleighs previous post was to remind us the center will us all powers and abilities left to them to draw energy and resources to the center.To counter this,it is necessary to establish the means to provide the ability to survive outside the system...regardless of the attempts to "harness"our resources to help "the state" survive.The Ideas of feral scholar,have merit...grow as much as you can where ever you can

Keep in mind the big idea: there is no such thing as a productive (industrial) economy, it's a hoax. Labor returns are borrowed, business cash flow is borrowed, profits are borrowed, everything is borrowed. This is why finance is indispensable. 'Business' is a stage set that is collateral for loans and nothing more.

The sanctions that super gravity posted could well be considered a act of war by the affected parties.Between the financial worlds death march,and various groups wanting "the war to end all wars",2012 is set to be a very weird year.

The New Economy was a hoax, like Saddam Hussein’s “weapons of mass destruction” and the “war on terror.” Americans were deceived by “their” corrupt government, by greed-driven corporations, and by corporate shills among economists and the pundit class into believing that they were trading middle class “dirty fingernail” jobs in manufacturing for better middle class “clean fingernail” high-tech service jobs. Instead, reasonably paid manufacturing and professional skill jobs, such as software engineering and information technology, were traded for lowly paid jobs as waitresses and bartenders and for jobs in ambulatory health care.

I see the final outcome of this great unwind being determined in a battle between two philosophies: (1) the invidividual is responsible for the mess he's in and so must suffer the consequences, versus (2) the individual is an innocent victim of more powerful forces and ultimately is unable to foresee the error of her ways and therefore needs rescue. The centralized powers have brainwashed us to believe in the former. We're uncomfortable with the notion that we are passive, naive creatures led astray by greater forces. We refuse to believe that the status quo doesn't have our best interests at heart. I don't really see the population changing away from this mindset. I don't see the people demanding real change. Occupy Wall Street might be the beginning of something important, and I hope it is. But when I see the debates in politics mired in silly distractions like "gay marriage" (cf. Rick Santorum), I'm pretty convinced we're doomed. Where did the Thomas Jeffersons go? With all theinformation we now have via the Internet, why aren't we angrier? Do you guys think we''ll still rise to the occasion?

We cannot stop using money - which is merely a placeholder for goods and services, even in a barter society. Sharecroppers and small farmers are effectively competitors unless everyone is raising a different crop, and that's not usually possible - some areas are more suited to wheat or corn than tomatoes.

When I was young, the family went 'farming' on Saturday. To the dairyman for milk and butter; to the other farmers for other crops and meat. But you have to exchange something you have for something you want and the medium of exchange, whether it is seashells or pecan shells has to be available to everyone.

I am self-sufficient for fruit, vegetables and water - but I have to work on my farm to make that possible and I can't take a day off to go fishing - unless it's a vacation day (rare on a farm) - or I can catch enough fish to have some extra to barter, and someone to barter them to immediately. But crops fail and the fish don't always bite. Without a way to trade sweat equity for food, everyone would run out of food at some point. Money allows barter to happen at a variable scale and at different times. People don't always want to trade for watermelons and potatoes. Once in awhile they might want a pail of beer.

The artists who grow the organic produce, in approximately the population center of Austin Texas, are taking the initial steps of the protection from big money, that you mention. These artists are very hip, deeply read and reread books about the Deep Green Resistance.They are fairly moneyless, but deeply introspective, visionary, principled and industrious.They are what the beginning of our defense looks like.I'm encouraging them to do what they do and keep a low profile."Deep Green Resistance" sounds like something the FBI, which wants "food activists" classified as "terrorists" (Wikileak) would like to infiltrate, entrap and bust.I don't know the path through this swamp, or how many of "us" will make it, but I do take the future of my 4 "children" very seriously. My wife and I have raised them to consider their survival in a post-peak-oil world of harsh necessity, and they all work hard, stay fit, and maintain their studies. We have kept them all out of debt, except the oldest, who is in med school and borrowed $8k at the beginning of the Fall semester.I'm a bike-commuting MD, myself.

I matriculated from UT/Austin back in the day and my good friend (Dr. Karen) is one of those vendors of whom you speak. Her company produces Texas olive oil - give it a try - you don't find that quality in the big-ticket stores - or anywhere, really. It's very unique. I doubt I'm supposed to throw a link to her company in here but the name Texas and olive oil in a search will find it.

I'm pretty sure that The Austin area is emptying the old aquifers and the water isn't being replaced. I fear Austin will be Las Vegas in a hundred years.

I live on one of the most remote islands in the world geographically, in a rainforest area with a twelve month growing season, so my options are unusually rich and varied. We get no county services out here (or even mail); thus we are essentially self-sufficient from day one. We do barter and understand the process and living off the grid isn't that difficult. We use US fiat currency and will continue to do so, understanding that it's value is the value we all agree to - not what someone in Chicago or New York says it's worth - it's not worth anything. Like gold, paper money has no intrinsic value. It's just a placeholder for eggs.

A lot of people cannot live this way but no vehicles have been down the dirt road all afternoon and I don't miss them. It's sorta like Texas was in the fifties.

Illargi's opening is more pessimistic about the 99% than I am. The meme he is using is from a grass roots expression of discontent with the power, wealth and control of the few. The OWS people are also aware of the need for a decentralized society. So far though the majority is pretty hooked on entertainment and lies,but the options to think differently are not so much troubling to people as non existent as a mainstream cultural presence. There are 50+ channels( last time I checked about a year ago) but no one is talking about a new direction, a needed transition. On the other hand no one would be saying drill baby drill if there was no worries out there. My feeling is that there are many who know the score and are waiting for sane civilized voices on the only public fora they know, radio, TV, newspapers, so they know they aren't alone and have some inputs on what they can expect and what to do. You guys are a beacon of economic and cultural sense,and I frequently refer people your way. Best wishes to Stoneleigh, Illargi and Ashvin.

So whispers mother culture in our ear (per Daniel Quinn.) Humans have very few needs, apparently: air (oxygen), water, food, shelter, and money.

The truth is that money is an arbitrary tracking mechanism used in conjunction with the other activities of life, which could be carried out (those that would still be relevant and desirable, that is) absent the tracking.

The belief that ending the use of money would of necessity change what farmers grow or the like is confused thinking. The circumstances under which money could be globally abandoned would require a general understanding that we could carry on as we currently do, just without the non-beneficial activities of money use, such as accounting, banking, investing, taxing, insuring, advertising, etc. The inability of some people to currently see that that's possible doesn't negate the fact that it is. That inability also wouldn't prevent those people from having to go along with the new paradigm if it were agreed upon by enough others.

The primary benefit would be the elimination of the incentives inherent in the use of money--the incentives that have (among so many other things) driven anthropogenic climate change that will put parts of Dr. Tom's island under water and more than negate all of the commendable, lifelong efforts of John Day's family and friends (as well mine.)

I don't 'do' confused thinking. I am a logician. The fact of the matter is that if I shoot a feral pig and hang it in the smokehouse - and you want some of it, you either have to barter exact worth for worth or one of us needs to make change. Now if I don't want fifty pounds of corn for a rack of bacon, but you want a rack of bacon, there has to be some means of equalizing the transaction.

I believe I mentioned that I actually live this life - it isn't some fantasy world I dreamed up. I do this on a daily basis. You might not live in a barter society, or the actuality might not be within your experience - but we who live in a subsistence society and barter for our bread (I make soap, sugar from sugar cane, and another friend makes high grade ethanol for fuel and runs a complete machine shop and foundry off the grid, but no one person can do it all), a measure of barter is required. That is the basis for a society. We cannot use silver or gold. There isn't enough of it, it is easily forged, and is not easily discovered as a forgery without a radiological capability - which means a central clearinghouse - and they have skin in the game, too - which makes it an unnecessary step in the barter process.

When you are talking about survival of a family or a village, it becomes a matter of trust and fair dealing - or someone will simply kill you. If you cheat me, I will. If you cheat someone else, they will. It's the most basic rule of survival, which seems to have been forgotten in the free-credit world. In the real world, actions have definite and immediate consequences, so everyone pays attention. It's worth your life.

If a fiat dollar is worth four eggs, or one pound of fresh fish or pork, a standard is established that allows and promotes trade. As I said, it doesn't have to be dollars. It can be anything that everyone can access but cannot easily make themselves. The problem still exists that you cannot trade equal-for-equal every time. You must have a means of carrying the difference. We call that 'money'. It happens to be convenient for us to use US paper money because everyone is familiar with it - and we can make change for it or deal in dollar increments, because we won't have much international trade if it fails. We simply don't care. We need it, it is convenient and readily available, and it makes sense to use it. The next option is firearms and ammunition, but they come dear in a subsistence society on a remote island.

If you live in a subsistence society, tell me how you equalize trade without 'money'. I doubt that you do, and I seriously doubt that you can offer a reasonable solution outside the obvious one.

Great expansion of the scary theme of centralization. One of the bubbly happy topics at NPR is the growth/hiring in Silicon Valley. Is there any relation between this and centralization, M&A, paranoid governments in the Middle East, Military Industrial complex?

Debt existed a long time before money - but some unit of measure had to exist for debt to be measurable (e.g. oxen or bales of hay etc.). It does not mean that oxen or hay had to change ownership as the debt could be written on to clay tablets. Of course, dollars are even simpler.

I live almost 700' ASL. Global warming, whether natural or anthropogenic (I am tired of arguing that point) doesn't concern me. Even the oceanfront lots where I live are 20-30' ASL.

We are going to be here for awhile, growing food and bartering it - using some form of money in the process.

We are thousands of miles from the nearest continent. We don't care what happens there. We won't be affected. We are impervious to hurricane and tsuiami, except for a few fools who live right on the water - but even then, we are safe for the most part. We are seriously underpopulated, so that will not become a problem in this century. We have no natural resources or deepwater ports, and we can just produce the food we need - so we are not an an invasion candidate.

In fact, when food WAS a problem, the population merely ate each other. Long Pig is still a delicacy. An invading entity would soon regret it.

Did I mention we are a secret nuke repository? We are as safe as a babe in arms.

I agree with SteveB. It's pretty apparent that the market mechanism falls monumentally at "valuing" the natural world - since that is the basis of everything, we can easily conclude that it fails at valuing everything else as well.

The technical functions of scarcity regulation could be handled in other ways.

The psychological barrier with getting rid of money is what it means to concepts such as ownership, property,sovereignty "fruits of labor, etc... They kind of go away or at least seriously transform

I believe SteveB is referring to some sort of global society where everyone simply shares the fruits of their labor, "from each according to ability and to each according to need". The question of how likely this outcome is (not at all, imo) can be separated from how it could theoretically work. In it's most basic form, money is simply the learned concept we hold in our minds about the relative value of goods/services. If that concept is dependent on a system of private ownership, then perhaps some societies could get around the use of "money". It does require a great deal of communal trust and cooperation, but those traits are certainly not outside the realm of human nature. At the end of the day, I believe we return to the question of scale. Complexity is an evolutionary force but also a corruptive one for human systems, as it creates structural inter-dependencies and abstracts from simple human relationships. Therefore, at the global scale, it is very difficult to envision "money" being eliminated, even theoretically.

I think Ilargi addressed it well in the present post with the theme of decentralization.

Corporate 'green' products will never make the cut. Centralized 'organic' is an oxymoron.

The 99% are so far from a holistic decentralized 'organic' vision of conducting life on this planet that it reminds me of Copernicus and Galileo's uphill battle to just establish the simple fact that the universe did not revolve around men on earth.

The 99% are, as Joe Bageant said, in the Hologram, the Matrix.

From Wiki:

"The term red pill and its opposite, blue pill, are pop culture terms that have become a common symbol for the choice between the blissful ignorance of illusion (blue) and embracing the sometimes painful truth of reality (red)."

The 99% of the 99% are firmly in the grip of The Blue Pill.

The Blue Pill is a lethal Ponzi.

Unchecked growth and centralization are essential Ponzi ingredients.

The Ponzi is an ancient idea, Something for Nothing. It is the historic core of modern organized financial crime.

Wall St, the face of modern 'financial services', is essentially just a store front for a transnational criminal syndicate revolving around centralization.

Centralization for the 1% is a Fetish.

To wit:

1.an object regarded with awe as being the embodiment or habitation of a potent spirit or as having magical potency.

2.any object, idea, etc., eliciting unquestioning reverence, respect, or devotion: to make a fetish of high grades.3.Psychology - any object or nongenital part of the body that causes a habitual erotic response or fixation.

So in mythology, when the Ancient Ponzi first made hot monkey love to Centralization, it produced Rome.

Rome then perfected the Ponzi and Centralization for many centuries, long before capitalism or just about any other ideological or financial 'ism' existed.

"The economy is a wholly owned subsidiary of the environment,not the reverse." -Herman Daly, Steady-State Economics (1977)

-<>-

"We are going to have a war on terror which you can never win, and so you can always keep taking people's liberties away. The media is going to convince everybody that the war on terror is real. The ultimate goal is to get everybody in the world chipped with an RFID chip, and have all money be on the chips, and if anyone wants to protest what we do, we turn off the chip."--Nicholas Rockefeller to producer Aaron Russo (America: From Freedom to Fascism) eleven months before the 9/11 World Trade Center attacks

I am not discussing a rabid world economy in which goods and services have been made the place-makers for money instead of the reverse. Unbridled capitalism will eventually change the focus of 'trading' so that limited commodities and even imaginary commodities can be leveraged ad-infinitim to create more imaginary profit than the underlying goods allow for. That's called a 'bubble' and it's not good business for anyone because it isn't sustainable; therefore it's immoral because someone will get hurt eventually while someone else will get rich at their expense.

If you consider 'money' to have intrinsic value, as people who are buying gold do, instead of being a direct representation of a physical good or service, you have corrupted the entire concept of it - which is to facilitate trade.

People say "No one can take my gold from me" but that isn't true. Yet no one has to physically take it - they only have to devalue it. PM is trading in a bubble. It is supposedly a physical embodiment of money, that will retain it's value, but it isn't. Because no currencies are on a gold standard, there is no fixed value of PM. It may sell for $3,000 an ounce, but it could just as easily sell for $300 an ounce - or $30 an ounce.

It doesn't matter in a barter society, especially an island-locked one with essentially no natural resources. The bottom line here is food and a place to trade for the kinds you don't grow. In that situation, the value of money means nothing - it's the underlying caloric value of food that matters - and that is subjective. First, the farmer only brings his surplus to market. He has kept out what he needs for his family. He may bring his product to market to trade for something else specifically, but there must be a means for him to trade if the buyer wants his product but does not have something the farmer needs or wants to cart home. And whatever he does cart home has to be consumed or preserved or planted before it goes bad - which is before the next market day in the tropics.

That is the underlying concept of money and trade cannot be effectively managed without it at any scale. It doesn't even have to be called 'money' - but without it, trade on an individual basis becomes impossible, if for no other reason than economy of scale. If I bring five thousand pounds of bananas to market this morning and you bring 5,000 pounds of oranges and Joe brings ten pounds of fish and Kanaka brings smoked meat, how does it get traded if Kanaks wants tomatoes and Joe wants hand tools?

How does the blacksmith and seamstress, who provide services but don't grow food obtain it between jobs?

I suspect that the people who are advocating the removal of money from the system are really advocating the removal of the system from money. The system is rotten, having forgotten why it was created in the first place. I further suspect they don't live on farms or deal with food from the perspective of growing it.

But the concept of trade is not rotten - it is a requirement in any society, even the smallest ones. And the idea of money isn't rotten because there is no other means of converting services to food.

And then there are futures. Suppose a herd of feral pigs gets in and eats my crop this week. It happens. If I have nothing to take to market on Sunday, I can't feed my family next week - unless I have saved some barter tokens and can give them out in exchange for food.

Philosophical discussions are fun, and sometimes enlightening - but everyone who doesn't have their food and water sources secure are wasting time in theoretical discussions. If you cannot walk to a source of food and water, and do not have a means to obtain it on a daily or regular basis in a natural disaster or man-made crisis, you are going to die.

Dr. Tom, I'll gladly swap "limited" or "presumptive" in place of "confused" thinking.

"The fact of the matter is that … there has to be some means of equalizing the transaction."

The assumption in your above statement is that equalizing is necessary. My contention is that it's not. Ash is on the right track with his comment on my perspective in this regard. Simply put, what we do today we could do the day we stopped using money, just without the money, then adjust from there. Nothing remotely impossible about that.

Certainly, in a society in which the general understanding is that you could kill someone who didn't equalize your exchange with you, that risk exists. I'm suggesting that it's possible to have a different general understanding and thereby eliminate the risk. (The risk of murder for various other reasons--including confused thinking about the general understanding about transfer of goods and services--would still exist, though likely at a lower level.)

I'm also not talking about life on a remote island, but human life in general all over the planet, including urban existence, because that's what exists today. (Best wishes on life out there. So what are you doing even bothering with reading this site and taking part in discussions? With a computer and internet access yet!) Ironically, based on your description, your island society might be incapable of pulling it off due to having too few people (i.e., too little current specialization), too few resources, and too little systemic waste and corruption to make the change worth the effort of rethinking relations; whereas in the rest of the more connected, wasteful, corrupted world, a critical mass could make it happen and has many good reasons to do so.

Nassim, I'm only about 100 pages into Graeber's book, but he gets very close to suggesting what I'm inviting people to consider. (Relevant to Dr. Tom's feedback regarding his island community's system is the quote shared here: http://libertarianoid.blogspot.com/2011/07/by-gifts-one-makes-slaves-and-by-whips.html.)

SecularAnimist, I think most people will understand that personal property could easily continue as well as laws to protect it (as long as might be necessary.) The clearest sign of ownership would still be occupation (of buildings and land) and possession (of smaller items.)

"I agree entirely with what you had to say as it ties in with what I read in Debt - the first 5000 years by David Graeber."

How did you like that book? I've been meaning to do a book review on it when I get the time. I think it will be an assigned text book after its paperback release in June. Except for a couple of very anthropology type chapters in the middle, I found it to be very engaging.

The concept of "now you owe me one" kind of indebtedness is something incredibly basic to humanity. While I agree with many Libertarian views, I think they go off the tracks when they believe in the rugged individual and the rest be damned. Co-operation and helping others less capable is hardwired into mothers at least. Perhaps that's why many (erroneously) believe that the original tribe was a matriarchy.

I highly recommend this book to anyone.

I also watched some interviews with David Graeber and he comes across as boyish as his students, but very smart and full of depth. He was involved in the earliest days of OWS and has been likened as the intellectual of the Black block and anarchists. You can see his politics in that he actually uses the word "communist" in its basic form of "from each according to their abilities, to each according to their needs." I was half way into his book before I realized his connection to OWS.

"Public anger was exacerbated by the discrepancy between the official data and that issued online and on Twitter by the US embassy in Beijing, which conducts its own measures of PM2.5 and frequently registers dangerous pollution levels.

Many bloggers hailed the role of the US embassy in the Beijing government’s apparent change of heart. “The effort of the US embassy should not be ignored,” posted one under the name Kangtou Wang on Sina weibo — China’s biggest microblog.

China has the world’s largest online population, with around half a billion web users, posing a growing challenge to authorities in a country that tightly controls its media."

"Armed with cellphone cameras, angry Chinese have started posting photographs of the expensive government cars — identifiable by their license plates — on a microblog site called Anti-Official Cars Extravagance that was set up in August."

But I thought the Chinese already rolled out their version of NSTIC? Maybe just a few bugs they need to work out.

Dr.Tom - without money there is no such thing as trade or markets. I know, quite the brain twister.

logistically speaking, getting rid of money would not be an issue. As Ash said, it's a matter of trust and cooperation which make it near impossible over the next generation without some kind of mass-instantaneous consciousness shift.

Scientifically speaking price points have no value. They are just a strange mass-subjective human opinions on a purely manufactured and manipulated supply/demand market dynamic. The contrived rules of money have zero to do with the very real rules of energy and matter. Which is part of the problem with the human condition. You don't need the concept of trade to move resources around.

SteveB "ownership" and "property" are just illusions we hold to death. Probably a social concept that has its roots in human societies developing in scarcity.

Meanwhile, in world revolution news:

In solidarity with Occupy Nigeria, EIE and other Nigerian movements, the occupy movement in the US is calling for local protests.

The Nigerians are trying to get control of their oil. Something to watch.

Ditto and I second your thoughts. I am with Occupy Vancouver and we are far from distressed, dispirited or dispersed. OV is active in rethinking, restructuring and planning for the spring. It is a seasonal thing.

The Occupy movement is building community, reaching out to the rest of the 99% and we are here for the long haul, (however long or short that might be).

I am a veteran of the anti-Vietnam war movement and it is so refreshing to see people engaged again, waking from the consumerist nightmare and saying howdy to their neighbors.

As we devolve further and the concept of trade and barter becomes more frequent, how does one keep ownership of their house?

I no longer have a mortgage, but still owe taxes on this property every year. Somehow I don't see the county trading my tomatoes in exchange for payment of taxes.

As I am older, this may not be an immediate concern for me, but assuming my children & grandchildren inherit this property, how would they keep ownership? Property would still be assessed taxes? If for no other reason, it seems there would be a need of some form of money just to pay taxes on property.

Unless you want every trade to be dependent upon trust and a good memory. Without a marker for goods and services, every transaction and the future expectation from it would have to be written down. When the future date arrived, if one could keep track of it all and still have time to farm, the parties wouldn't agree to the terms they remember. So every detail would have to be written down and cross-signed. And they still might not agree that that's what they meant. And every trade would have to have a due-by date. If the counter-party didn't comply by that date, what then? Suppose the pigs ate HIS vegetables the day before?

What's easier: Hand someone a paper dollar for 6 papayas and be done with it, or write a contract for every orange you trade? What happens if you write a thousand contracts this week for a thousand oranges and no one shows up next week to pay up?

Easy. You are screwed, because it is not worth one orange to go farm-to farm and try to collect, in addition to which, after you walked for an hour to someone's farm, you find out they broke a leg and can't pay this month - or they are insulted that you don't trust them for the orange and beat you to a pulp.

There is only one workable solution, and it's the original one. You make the trade good at the time of the trade using something that is barter-able. The deal is done, there is no confusion, and if you don't like the terms, you don't trade. You go around and get the best deal you can. As everyone else is doing with YOUR products.

I just came from our farmer's market. I dropped less than twenty dollars and got tomatoes, lettuce, cucumbers, eggs, onions (and green onions) and bananas for two people for a week. All fresh and organic. I would still be there signing contracts if I couldn't make the trade on the spot - and, in fact, nothing much would get done at all.

Explain to me how you can replace the logistical system of trade by trust knowing that memories are imperfect and contracts have to be written and enforced. Because maybe I simply don't remember getting an orange from you.

Explain to me how, even if everyone were honest and had the best intentions, how that could work.

And then explain to me how long it would work if some of the people started going hungry.

Finally, explain to me why anyone would even consider doing that. We do have a lot of stands in Hawaii that aren't occupied. There is a price list and the goods are on the table. You take what you want and leave the price - and that works - but money is still involved because it is the medium that facilitates trade.

That's really a good question. I suppose it depends on where you choose to live. Where I live we have no county services - no road maintenance (or paved roads), no water, fire hydrants, sewers, or police patrols. The fire department will come, but not in time. So my one-acre farm, with a 2004 era home is assessed $300 a year in taxes. My other one-acre farm with no structure is assessed $100 a year - but both of those fees will be cut by half in June when I turn 65.

I can manage that with tomatoes. And I have no family, so I am not very concerned.

I originally paid $144,000 for my home and property in 2004 but I took 80% of the equity out a few months ago ($200k @3.75% APR) and put the cash somewhere safe. When property values tank by the estimated 50-90%, I will ask for and get a remediation of the mortgage to the value of the house - so my mortgage, which is $1001 a month now with the taxes and insurance included, will go to ~$200 a month - if I choose to keep paying at all.

And I still have the cash, although I did put some of it into durable goods and firearms, increased my vegetable yield, doubled my water storage capacity and added filtration for radionuclides and organics down to .01 micron. I am in the process of raising a radio tower. I have two good 4x4s, we make our own ethanol fuel and, of course, I am off the grid.

Dr. Tom, that you are requesting more information is commendable (and appreciated, at least by me.) Many people for whom this alternative isn't completely clear would just dismiss (or ridicule) it.

Not to speak for SA, I'll try to provide the explanations you requested.

"What's easier"?: What's easiest (a third alternative) is to not track the transactions/exchanges at all. No money, no contracts, no implied balancing at the interpersonal level (because it all evens out sufficiently at the grand scale.)

Keep in mind that a society in which the use of money was discontinued would be a society in which a critical mass of its members agreed to the general understanding that tracking is unnecessary. So when you go the store and pick up your fruits and vegetables, the people who brought the produce there would expect you to pick up what you wanted and walk away. (Maybe you'd smile at each other and chit chat a bit, too.) Whether the same farmers would continue to bring their produce there is another matter.

"Explain to me how you can replace the logistical system of trade by trust knowing that memories are imperfect and contracts have to be written and enforced."

See above. It's not necessary.

"Explain to me how, even if everyone were honest and had the best intentions, how that could work."

Because it currently does. In our current system, we just add the layer of passing money (or a credit or debit card) and receipts back and forth along with the transfer of the goods and services. This alternative would just eliminate the unnecessary part.

"And then explain to me how long it would work if some of the people started going hungry."

How would it work under our current system? One potential difference: I suspect that we'd have fewer incentives interfering with our propensity to help out someone in need if we were no longer using money. If there's really not enough food to go around, having money isn't going to change that. If anything, it just detracts from our collective ability to grow, raise, and collect food. I also suspect that fossil fuel supply decline will be the overriding factor, not our ability or willingness to do the work of feeding ourselves.

"Finally, explain to me why anyone would even consider doing that."

Because we can't all live in Hawaii. (-:

Seriously, because the vast majority of environmental degradation, human exploitation, and government corruption (to name just the major categories) are due to actions driven by the incentives inherent in the use of money. Ending the use of money would eliminate most of those incentives and greatly reduce such actions. Most mental stress in our lives is related to the use of money, so much of that could be eliminated as well. Presumably, most debts would be cancelled, so the stresses around that would also be eliminated. And not insignificantly, to avoid the waste of time that using money requires for writing checks, waiting at the register, balancing the checkbook, filing tax returns, researching retirement investments, waiting for the bill at the restaurant, accounting in general, insurance sales pitches, filtering out all the advertising, etc., as well as all those jobs without benefits in the sense that they don't really benefit us. I find that to be a compelling list. Maybe you don't in your circumstances.

I liked the book above all for making clear how money came about - credit came before money. He shows clearly how everyone else from Adam Smith onward had it backwards. For that reason alone, I rate it highly.

You actually make a great point and I agree with it. The problem is this: It all works out in the long run because everyone eventually dies.

In the short run (~3 generations) at the macro level, people are greedy. You cannot change that because it is a genetic survival mechanism - altruism isn't.

So it is not a matter of the cancellation of debt, which no one who owns debt will agree to anyway - nor with the disuse of money nor of trust.

It is merely a practical matter of individuals who farm or otherwise exist as individuals, and not tentacles of huge corporations, who must try to do the best they can in their own circumstances.

Things work for me, not by virtue of aesthetics or ideology - they work for me because the must, or I cannot survive. So I must conform to the method of trade which is generally accepted in my village, or hamlet, or at my farmer's market - or people won't trade with me.

We are the most diverse place in the world and English is not universally spoken. One must speak many languages to trade here, and a lot of ethnicities are not in the mood to be trusting. Because I do not speak Tagalog or Ilokano or Thai or Chinese or Indian or...or...or... we all trade as best we can. And unless you have a homogenous society in which everyone agrees and complies and trusts - which you cannot even find in a family group, you will simply never trade. The stark realities of the world preclude it.

Go to a farmer's market in a rural area of a country with which you are unfamiliar. The prices of the items is not marked, you don't speak the language and, in many cases, you don't even know what you are looking at. So you decide to what? Pick something up and expect the vendor to trust that you will return someday with something of equal value? That is a failed strategy from the get-go. Not only is it unreasonable, but it is illogical.

I asked for an explanation of some reasonable method of trading without the use of a placeholder. You have not provided it. You can't provide it. It doesn't exist. Money is not going away.

We are the most diverse place in the world and English is not universally spoken. One must speak many languages to trade here, and a lot of ethnicities are not in the mood to be trusting. Because I do not speak Tagalog or Ilokano or Thai or Chinese or Indian

I am hard put to guess where that might be. I can perhaps exclude some locations - North Luzon, Thailand, Indonesia, China, India. Actually, it could be Melbourne. :)

Sometimes this barter is based on a vague "that seems fair" system. I provide veterinary-care for your animals, you give me tasty cuts of dexter beef.

Sometimes the barter is framed around equivalent dollar cost- I give you an animal valued at x$, you give me so many hay bales valued at y$. It would be really hard to do such a trade without having some underlying "worth" that comes back to money.

You can set up complicated 3 and 4 way trades, but the trust and coordination issue becomes much more vexing.

Trying to set up arbitrarily long barter chains to lead me from my starting trade item (live animal, meat, fiber, my skills/labor, whatever) to a distant item I want/need becomes so cumbersome as to be useless.

What wil the Kingdom of Saudi Arabia trade for their hydrocarbons? I hope they don't expect me to send them live animals. Reading Steve from VA's blog made that issue painfully clear.

Barter only works on the viliage level. And even then , you need a reciprocity of trade value (usually, roughly), or trust starts to diminish (as people feel cheated). Sure, we offer "mates rates" to friends, but that's part of the trust system. Likewise I do volunteer/charity work, so it's not like every transaction is "monetized", even in this modern world.

I don't care if we're using NZ$, US$, New Drachmas, or even hunks of shiny metal, so long as it is recognized by my trading partners.

Also, a suggestion to would-be farmers-- I highly recommend pastoralism. You get much more free time than a rice farmer! :)

Dr.Tom said...Logistics is exactly the issue.Unless you want every trade to be dependent upon trust and a good memory. Without a marker for goods and services, every transaction and the future expectation from it would have to be written down.

Money is not necessary on a small community level. There are plenty of communities that operate without money. It would be worth reading JMG's piece on the favour economy if you haven't already. (Sorry, tried looking for it, but cannot remember what its title was: perhaps someone else here knows)

Of course one would still need some form of exchange or official money to trade with outsiders or pay taxes, etc.

@Jeotsu: Naturally, I agree with you. I still suspect that the people advocating the disuse of money are not really talking about money in the sense that it placekeeps value. Gold is supposed to do that as well, but it doesn't. And I also agree that barter, based on value, only works directly at a small scale.

Of course, direct barter doesn't provide any way to save value. You trade value for value and then you eat it. Money allows savings. Money also allows for larger-scale transactions that wouldn't be otherwise possible. I can't imagine running a herd of cattle from Texas to Kansas and trying to barter each one individually - and it wouldn't be possible for everyone who wanted beef to go to Texas and try to drive one cow back to Chicago.

The weather here isn't conducive to growing certain things - apples and hops, to name just two. If we want to brew beer, we have to import the hops or use a cousin, marijuana for that purpose (it seems to work reasonably well - no one complains). And in order to get apples, we have to get enough to keep the price reasonable.

We can't import live lambs from New Zealand, but we can import frozen lamb - but not on trust - at least not at the individual level - but we can import a whole herd in a refrigerated container. If the importer wants to barter out each cut, he still has to figure in his costs before he knows what he has to get in the trade.

So it's not necessarily money we are talking about - it's the calculation of value and the ability to facilitate differences in value between different items - the mortar that holds the bricks together.

Insofar as mega corporations which exist to make profit their product, I don't think they ought to exist - and I don't think they are people or have the rights of individuals. But I'm not sure how to stop it except by the old fashioned way: when countries go overboard, they fail and another steps up.

The US is going to fail. I hate that, but there it is. So I became self-sufficient and I can, in fact, barter goods and services for goods and services without money if it comes to that.

But most people can't, or won't believe the economy can really crash. I have no idea what someone living in a 30th floor apartment in a major city will do when they go to the store and there is no food. Even a week will be disastrous.

It depends on the community. Money isn't used in many tribal villages, and possibly not in some close religious communities. My experience is based on the conditions where I am and, because of many issues, including ethnic diversity, some measure of value is needed to facilitate trade.

That it is money is simply because learning to count a currency and relate it to a product is easier than learning a language or converting to a religion or attempting to understand cultural values. If everyone is on the same page, no matter how, trade can work.

I thought Ash summed it up well with his comment @ 9:17 AM. Maybe he should have gone "KD style":

At the end of the day, I believe we return to the question of scale . Complexity is an evolutionary force but also a corruptive one for human systems, as it creates structural inter-dependencies and abstracts from simple human relationships. Therefore, at the global scale, it is very difficult to envision "money" being eliminated, even theoretically .

Ozzie Jurock was a guest on Michael Campbell's radio show (Money Talks) yesterday (Saturday) on radio station CKNW in Vancouver, Canada.

It is well worth listening to 2 minutes and 15 seconds of this interview where Mr. Jurock discusses recent house prices in Vancouver.

The link at the end of my post will take you to the audio vault page of the radio station. You do not have to register with the station to access the audio vault.

At the top of the audio vault page put the date Jan 7 in the first drop down box and 9:00 AM in the second drop down box. Then click on the "listen" link. When the page loads use the slider to fast forward to the 43 minute part of the program. Be sure to listen to the full 2 minutes and 15 seconds of the interview as there are two good quotes in it.

Hey Dr. Tom. . .I wholly agree with your position. I find myself perpetually at odds with many within the "sustainability" community who want to rid the world of money, as it is some kind of evil-- a position which I've learned to translate as "people should just give me stuff for free when I ask for it." It's worked out poorly, that.

Are you aware of the local group at http://sensiblesimplicity.lefora.com/? It's centered on the Big Island and I think you'd find a lot of kindred spirits there.

I read your comment that you live on a secret nuclear repository, and I figured you lived on Kauai, but your later statement implied that you live on Hawai'i.

It is really a special economic case, since there are only 240,000 folks, and what goes around comes around, sure thing. There is a whole lot of gifting of fruit, which does not come across as formal barter. I'm told that gift economy is the rudimentary form of economy.

Though I live in Austin, Texas, I have worked 2-3 months/yr on Hawai'i, in Kohala, for 2008-2010. My understanding is that 357 magnum is the round most used for pig hunting, since there are so many police sidearms in use. I think that would be a useful barter currency.

You have had an opportunity to study the situation, and have chosen something like an ideal setting. I have spent time bike touring the South Island of New Zealand a few years ago, with my family. Hawai'i strikes me as the more sustainable and defensible location in times as we may soon be entering. I am freshening up my island relations with a spate of Christmas letters with handwritten personal notes. Gotta' get a homestead set up for the kids, should it come to that.

I suppose one underlying thread to the discussion of scale, complexity and money that we should address more explicitly is what level of simplicity we think the world is heading towards (or perhaps, what level we hope it is heading towards).

I look at the late 19th century- which is a probably an energy intensity we could sustain with "renewable" resources, as a possible model.

In the 1880's they were exporting frozen lamb from NZ to the UK on clipper ships. This was not a world of rehypothocated derivatives and HFT, but it was a world that was way beyond the village level, and thus in need of currency of some kind.

If we truely are on the way to a place where the villiage is the peak point of complexity, then most of us won't live to see it, as the violent transition towards shedding 95% of the population will be very Mad-Max, and the sorts of people who hang out on the internet are probably not going to be the survivors. Just saying.

Finally, I think we always need to take the heterogeneous nature of any coming collapse into account. I think NZ has a good chance, and is a good place to lifeboat. Massive agricultural surplus. Pretty peaceful society, which still has a non-corrupt and mostly-trusted government. And wIth 80% of the power coming from non-hydrocarbons (wind, hydro, geothermal), with a grid not connected to anyone else, the lights may well stay on- for decades or centuries to come.

NZ could go to 100% renewable power overnight, all we need do is shut down the Tiwai Point Aluminium smelter- or we can keep it open and "export energy" in the form of aluminium to a world that lacks the free energy to make it any more.

It's also really nice being surrounded by the "roaring 40's", so that it takes pretty good boats to get down here. The greatest danger could be a China that decides it is time to annex a new food-producing provence.

I graduated from UT a little after Whitman's attack, attending 1976-1982, and working at Brackenridge Hospital, which turned me toward medicine.The source of my data for the most common round sold on Hawai'i is a gun/ammo shop in Kona, where a friend of mine inquired as to what they sold the most of, and why they thought that was. As portrayed to him, the current police sidearm is not the issue. The prior sidearms are what they use for pig hunting. I have no further intelligence on that. It looked to me like the hunters in Kapa'au, the ones with dogs in cages and 4WD trucks, kept rifles. Appearances can be deceiving, I guess. Maybe they buy their ammo elsewhere.In tough times there would be a lot of fruit getting eaten, and pigs would soon be at a premium, I guess.

A lot has to do with sheer,dumb luck.And,were I you,Kiwi, would make sure I understood wind patterns,and fallout preps.When they start tossing thermal-nukes around Asia,lots of folks will get dusted.Badly. That industrial civilization is on the downward spiral,we might agree.We are in the middle of peak oil NOW.This is what Peak looks like.Stabilize a bit...for a while...then another lurch down. "Slow"collapse it is...sorta. When the USA hits Iran,or the financial world implodes,then we get the next lurch down...and it will be a unmistakable message that we are all well and truly hosed,as my Canadian friends would say.

You said that 'greed' is in our evolutionary dna and altruism isn't. I don't think there's any evidence that either is in our dna. What is in our dna and how it results in a complete human at the end of the process is only partially understood. To go further and say that some cultural artifact that is mostly subjective is in our dna is a best unprovable. A lot of stuff has been ascribed to evolution that has accepted as theory as opposed to a narrative of what happened. The narrative may be accurate the basis for a theory may not exist.

Another big sqeeze on the way, this time the environmental regulatory process. It is such a pain in the ass for Canada's corporate gov't to protect the environment. So why not write some new laws and change the process.Economics will trump environment. Or so these foolish people think.Conditions making it uneconomical to develop oil fields can't come soon enough. I do get worked up when law is rewritten to serve profit,not justice.From the Globe and Mail,"Radical groups spur Tories to speed pipeline review process"

>The bug they (and US DHS) need to work out is that some really smart people designed the internet to be unkillable.

F'rinstance, getting around SOPA is about 10 minutes work, albeit with a serious performance hit....

-------------------------------------------

I wasn't thinking in terms of "killing" the internet. Let me give an example. I'm confident (and hope) that someone can shoot a ton of holes through it. It would be comforting.

Lets's say the DHS/NSTIC is currently performing data mining and fancy statistical analysis (text analysis) on internet data. And they have a list of microblogging services (maybe blog sites too?) that their "analysis" deems these services/sites to be potentially "subsersive". Certain words/phrases just occur too often (like 911 stuff, those things in the sky - ch.. tr...., etc.) for the DHS/NSTIC to be at ease with. After a terrorist attack (or other...maybe a burp in Hormuz, N. Korea, etc.) happens, the DHS/NSTIC raise the security level and a part of this involves notifying the potentially "subversive" services/sites that access to their service/site will now require a "real-names authentication path are using National ID cards coupled with real name submissions. I do not know exactly how this would work but it seems possible. Then once it's in place, you know it never goes away.

It seems this is already happening in China to some degree. From the NSTIC link:

The paper I read about the Apocephalus Borealis fly says that they are native to N. America and were previously known to parasitize Bumblebees and Paper Wasps. This species of fly does not parasitize ants. The ants have their own species specific parasites.

Larry Gilbert's Lab at the University of Texas at Austin does research on using phorid flies to control the invasion of non-native fire ants in the region. You might want to check out that research in terms of your concerns about the introduction of non-native flies.

To me:"You said that 'greed' is in our evolutionary dna and altruism isn't. I don't think there's any evidence that either is in our dna."

I used greed and altruism when perhaps I should have phrased it differently. The organism, defined as any life-form, (although I refer specifically to bi-laterals here) will compete for the available resources in an effort to live and reproduce. The more successful it is, the better for it (Dawkins: 'The selfish gene'). Since natural resources are limited, the drive to live and reproduce is necessary. It may not be expressed specifically in our DNA, but the urges to eat and have sex are typically strong enough to cause the body to expend sufficient energy to do them on a regular basis.

Hunter-gatherers may well bring home food for their family unit or tribal group, but by doing so they invariably earn the right to take the choice cut which, in turn, provides then with the energy to hunt or gather successfully again, to have the first choice of mates, and to enjoy a certain reputation within the group. The third benefit is a necessity because if the hunter is injured or grows infirm, that reputation will, usually, insure that the group will still feed him .

Whether those instincts can go awry and cause one individual to begin hoarding or attempt to establish himself as a ruler is a matter of conjecture DNA-wise. But it certainly happens, so something must cause it.

@ogardener:

'Trolls' typically do not present a logical point of debate. The document to which you refer disagrees with me. The author calls upon some etherial model of enlightenment rather than a demonstration of any factual basis - and refers to his body of work as his belief - not as an observation of real-life experience - as I do.

I write on the basis of intelligence guided by experience and I give real-world examples. You are free to discount my opinions but, because they are presented logically, the term 'troll' is misused. I am not trolling for a reaction. I am debating a point. Successfully, I hope.

Thank you,I had a pretty good spin from that little bit of data.I have to call a couple of people and do some s'plaing myself now..ouch..

You know, there was a time being a bee-keeper just involved getting stung once in a while...Now I find I have to be a combination of Scientist,Gardener,Botanist,...and Tech....and I still get stung once in a while.....thank you, once again,

Are we conflating a system (currency) with its abusers (Modern bankers)?

Currency (money) is not in itself evil. Yes, it's has been used and abused time and again throughout history, but I think we still need it.

Would it be fair to say: "Chemical weapons are horrible. In the last century they've caused vast harm. Thus chemistry is evil. Anyone who does not walk away from chemistry is not thinking freely and properly and is caught up in the chemistry-industry-scam propoganda machine."?

Do people want a society where "peak complexity" is a village of 200 subsistence farmers all bartering based on trust? I certainly don't. For two reaons: (1) because that would be a pretty bleak existence- I'm not bemoaning loss of HD TV here, I'm thinking no medicines, and (2) because getting to that point will result in the death of almost everyone. ANd if you kill *almost* everyone, it's too easy to mess up and end up killing everyone. Humanity certainly has its flaws, but I am not so nihilistic as to crave its extinction.

We need a mechanism for exchange beyond barter. That means a currency of some kind.

I also freely admit that I value actual data over theories (i.e.- if the map and the terrain disagree, trust the terrain). Barter works- to a point- but beyond that it doesn't.

Bringing up issues of academic credentials verges on an ad hominim attack. Who cares? Can the logic or evidence be supported or refuted? That is what matters.

After some decades within the razor-wired walls of the ivory towers, I've leaned that the correlation between lots of letters at the end of a name and the ability to think cogently is rather poor.

----And in reply to Snuffy. If the nukes fly, all bets are off. I think that a future to hope for is one where the "long emergency" is in fact *long*. A few more decades, please, before people get too desperate or crazy to start nuking each other. If countries have wound down their spare energy over those decades, then the chances that the missiles are in good repair, or that the Pu "pits" have been recently remanufactured are low. If most of the nukes fail to fly, or detonate, it would still be a mess, but not a planet-killing mess.

I suppose that retired scientists should have to produce credentials for every unknown troll who wants to see them, but I am retired and you aren't offering me money. Therefore, your request is out of order.

We were discussing money. I am not an economist. I merely live in a condition of nearly complete self-sufficiency and a barter economy, so my observations in that regard are valid and my professional credentials, are no longer necessary.

If you want to take this to ad-hominem levels, state your case for doing so and explain why, having earned an advanced degree, I am not still entitled to the honorific in retirement without forwarding a CV to everyone who cannot debate on points and must fall back to non-sequitur arguments.

Interesting that you would mention Pu 'pits'. Possibly you are a nuclear physicist - most people won't understand that colloquialism.

As you clearly understand, delivery systems and warheads have to be rebuilt on a regular schedule, but have only an 'X" rebuild cycle lifetime after which time they must be discarded...or, in the case of the US, sent to Dimona to be 'reprocessed'.

I think the US should try to cut Israel loose but we cannot - we are joined at the hip in ways we can no longer discuss without being 'disappeared'.

Dr. Tom, I see now that Ilargi was able to salvage my Jan 8 comment in response to your request to SA for explanations. Please take a look if you haven't already read it.

With regard to greed, I think that the relevant question is not whether or not it exists, but rather under which type of system its negative impacts could be minimized. My contention is that our current system facilitates it, while a system that doesn't use money would minimize it.

You suggested the option of punishing corrupt bankers. Why does that not happen? I submit that it's because our use of money has resulted in a system in which it isn't done. To whatever extent it is done mildly, our system's incentives will lead others to step in and perpetrate comparable crimes. The corruption is inherent. The choice is between inherently corrupt and a new way of thinking about distributing resources--not without its own challenges and problems, but arguably far less destructive ones.

''all they need to do is ensure that debt grows more slowly than their tax base'' - when somebody *assumes* GROWING tax base, it is still a Ponzi economist, I think. And, if the tax base is not growing, but stagnating or contracting, debt is a hell of a problem (as we can see now...)

Alex

[I don't understand you. Assuming a growing tax base appears entirely natural, and is supported by past experience. Those who have problems with debt (Greece, Italy) don't have that problem because their tax base is shrinking, but because the rates they have to pay are growing -W]

I believe Mr. W is trying to identify cause and effect at a very small scale of resolution (i.e. Greece's sovereign debt crisis), which is a pursuit of folly. Debt deflation on the global scale at which it is occurring today is an unstoppable force, and self-reinforcing in many different ways. With regards to Greece, it has been running unsustainable budget deficits for years now, partly due to the extremely high interest rates it is charged to borrow from the private market. In response, Greece has tried to reign in its debt and deficits through austerity measures, while the Troika subsidizes its short-term borrowing through conditional "bailouts".

But this has led to severe economic contraction and even worse deficits, as both the Greek tax base and volume has decreased along with employment/wages/consumption and sociopolitical unrest has worsened (it's a bit difficult to collect taxes when your tax workers are all indefinitely on strike). Worsening deficits prompt more austerity, more economic contraction, more unrest, rinse and repeat. The only people (or institutions) that benefit are the major Euro-area banks that keep their toxic bond assets earning some minimal income on interest, while they continue dumping as many as possible to the next greatest fool, the European taxpayer, through the IMF/ECB/EFSF.

PS - Assuming a growing tax base is not "natural" and is actually a very unrealistic assumption in a world of economic and financial contraction.

Money is a useful tool as a vectored utility symbol, to commodify abstractions including itself, and to express valuation between disparate markets, but its own utility value for the human markets cannot possibly be expressed in the price of money itself.

Some kinds of money can be readily used as a gravitokinetic weapon for social control, privately owned money systems are exploited by banking cartels for power and profit, these do easily enable misappropriated government and tyrannical commercial powers.

As Governments now only accept payment of taxes in the form of privately owned and issued interest-bearing banking credits instead of publicly issued money, all sovereign spending is now subject to mathematically inextinguishable debt, the most potently weaponised abstraction ever conceived.

"With regard to greed, I think that the relevant question is not whether or not it exists, but rather under which type of system its negative impacts could be minimized. My contention is that our current system facilitates it, while a system that doesn't use money would minimize it."

You sent me on a search for alternative systems. One of them is the Venus Project. Reading about it, one soon comes to this: "The Venus Project is seeking donations to help further development of a serious major motion picture depicting life in a resource based economy."

Resourced-based economies work on very small scales. I found the majority opinion here: http://answers.yahoo.com/question/index?qid=20100818123009AAhAPA2

Money aids trade and societies which attempt to exist without it do not flourish. That's why it is in use. If it were merely a useless intermediary, it wouldn't have been invented in the first place.

I agree that a lot of the uses are irrelevant to the basic purpose - like anything else, as soon as it became useful as a weapon, which must have been the day after it was first employed, bad people started misusing it. Still, it isn't the fault of the money, but of the people - and if it were displaced by another system the same people would exploit it.

So money itself isn't the problem. It is useful for what it was intended to do. The problem is that it was intended to hold the place of services until it could be traded for food or hold the place for food until it could be bartered for services - or a combination thereof. The service is performed; the food is consumed, but the money doesn't disappear.

So a moneyless society might not be that great a place. It certainly wouldn't be very diverse. In fact, it would be pretty boring. What initiative would anyone have to do anything more than obtain food for the day? How would someone come to own anything? And how could a population of more than a few million survive? I think the practical nature of such a society would be very like the native American tribes who had no concept of ownership past personal goods. They existed for thousands of years without money - but it was not an idyllic existence.

You are, I believe, describing a world in which life would be hard and short. The world, perhaps of Ötzi the Iceman - in which families would possibly feed the elders in good times, in exchange for their experience. But bad times would be VERY bad for the old and injured.

My choice would not to have to do that. I understand that issue too. I am in my mid-sixties and have no family or close relatives. If I need something done, I do it or pay someone to do it. But I expect the economy to crash, and when it does, I will live only as long as I can feed myself or contract a serious medical condition - and then I will have to step up to an escape plan simply to avoid a long, lonely, and potentially painful death.

We are already getting there. What cost $30 in a grocery store within recent memory now costs $130.I can't do that and everything else I need to do and I can't grow enough food ongoing into my seventies to barter. So although I am self-sufficient now, I will not remain so simply through the natural process of aging. In a moneyless society - or even in the richest country in the world, my resources will run out.

My family can't support me because they don't exist and it's not the job of the government. So what of people like me in a cashless society?

I would expect the term 'anomaly' in this context to mean the difference between the observed temps and those predicted.

If so, that graph appears to say that for about 350 of the last 400 years tha northern hemisphere temperature was below what would be expected from solar radiation. Then in the last 50 odd years the temperature has downright skyrocketed.

Admittedly the current positive anomaly is brief, and would be within the noise _IF_ the previous 300 odd years had hovered around 0. But they did not. They were consistently from -02. to -0.4, which makes popping up to +0.2 look quite significant.

Somewhere in the conversation AB says her friends kept emailing her to use "the right terms" and not confuse people on the current situation. The merging of corporate and government power she was informed was fascism and should be labeled correctly as such.

AB then went on to liberally refer to many of the various escapades of the 1% as "fascistic", Olé AB!

At the end of the interview she exorts everyone 'for the love of God' to by as many guns as they can as sort of a blanket solution, it's priceless, don't leave home without them.

The only fly in the ointment was this first comment just below the video:

"This chick is crazy. She's on her youtube channel burning pages of the Koran, using﻿ bacon strips as bookmarks…."

I am still researching because I want to know what is possible, not just what I think is possible - and you have set me on an interesting quest.

I have a solution at the personal level. It was employed for the very purpose of preventing the situation we have now throughout history and might still work, although I suspect the only solution that would actually work is restoring the earth to a population of ~3 billion people and holding it there.

Since that won't happen without an intervention (which will be possible as soon as Iran develops a delivery system - which, in fact, they are bartering with Russia for as we speak), the only other easily employable solution is to absolve all debt every 7 years.

Bang! New Year's eve all accounts are settled and New Years day everyone begins fresh, with clean slates. All money is changed to a new issue, preferably based on a precious metal to prevent unlimited asset creation out of thin air, and life goes on.

Naturally, this would require some asset redistribution initially. I am not sure any currently known socio-economic system could accommodate it, but I would assume that it must be predicated on a real system of Republic which could not easy be circumvented - as the United States was originally envisioned, but which has been emasculated.

Might I have opinions about how - or if that might work? It is possible that it might be a good time to begin to consider just what will happen if the world goes into an economic failure mode and someone tosses a nuke.

Most of the solutions I read are based on the irrational belief that people are rational.

Interesting. I happen to collect firearms and have for over fifty years. I am not as interested in shooting them, but I am certainly one of the gun 'people' and train SRT teams as well as give instruction to individuals and, sometimes, coach olympic hopefuls.

While I am articulate...physically...I consider my protection and that of my farm as my personal responsibility; not that of the state. When seconds count, the police are minutes away. Where I live they sometimes don't come at all. We don't call them anymore.

Insofar as Ann Barnhardt, I own half a dozen of her domains. I was a bit put off when she began spouting Roman Catholic dogma - and she and I no longer speak over that. She is very strong-willed and won't back off what she thinks is right. For that I commend her. She shut her brokerage because she grasped that the commodities market had been abridged and no prosecutions were forthcoming. That's gutsy.

I can study history and I have - and do. But I cannot study the future. I am glad to have lived in the prime of the American Dream and had the opportunity to live the past vicariously through my grandfather and father. My father was born before the Wright Brothers flew. My Grandfather before the Civil War.

I am not worried about myself as a practical measure. I have sufficient resources to survive as long as I wish to survive regardless of what happens elsewhere. Even a full-blown nuclear war would not likely affect me radiologically speaking.

I have lived longer than I expected to and have had a good time. To me, every day is a good day to die - but I intend to sell my life dear in the defense of the only thing I still believe in: The Bill of Rights and the US Constitution. I don't know how that may play, but I subscribe to Alexis Carrel: "The first duty of society is to give each of its members the possibility of fulfilling his destiny. When it becomes incapable of performing this duty it must be transformed."

Dr Tom: Thanks for the UCSD link. There are a few good evenings of reading there in his other articles.

In the early sixties I was a co-pilot on a B-47 crew. I went off to Wichita to get my own crew and go through aircraft commander training. My old crew got a new co-pilot and a few weeks later ran into a mountain at about 420kts at night. It seems they let down one step too early to a low altitude bombing run on Boise. In my estimation, that’s the way to check out; now living ... now dead. I have often thought of my old A/C and navigator. Here some fifty years later, I am nearing the end of my time, like you, still in fair shape but waiting for a … whatever to happen.

Tom, there is not much doubt that the elderly (you and me and others here) in some sort of exponential function will be first to go as the long descent continues. No doubt the future belongs to the young; I just wish their eyes were more fixed on their physical survival. Some have talked about steps of grieving and a bunch of other esoteric BS. It’s a fact, we have a finite planet and shxt will happen so live with it.

One current question we might ask, though, since all presidents take an oath of office to support the constitution. Which of all these guys will make sure congress will declare war before we sent our young men and women off to fight some poor ninny for the benefit of the military-industrial complex. OTOH, maybe they figure we have too many young people as well as old.

Sir, please allow me to express my most sincere thanks for your service to the country. My father served in WWI and WWII and you represent the last generation of real American patriots before my generation was flung into the Viet-Nam war. I am a Marine combat veteran of that war and it was a political ploy which did much to destroy our country.

I am sure you all knew that B-47 strikes were one-way missions, but you still flew them. That kind of dedication is sorely lacking in America today. Again, I thank you for your service - you may well have allowed me to attend college instead of monitoring radiological damage from incoming strikes.

I am sorry about your old crew. I am a licensed commercial pilot with an IFR rating and I understand the concept of controlled flight into terrain. I am no longer current, but I am still current as a SCUBA instructor - a deep dive is roughly analogous to a mountaintop. I have a way to go if I ever need to go that way.

Out of chronological order: I read every edition of AE. My circumstances are different than Stoneleigh's and so I made different preparations. To me it makes no sense for a single old man to live in a place where heating and air-conditioning are required for survival - so I don't. In fact, if I cannot continue to farm, enough food falls off trees here to sustain me. I am very glad that I lived the majority of my life in the prime of the United States. Whatever happens from here out, that doesn't affect me personally, is someone else's problem. That which does affect me personally is my problem but it is merely a matter of time before I miss a visual or audio cue and lose. Still, going out as a warrior is the best of all worlds.

It has been my opinion, and remains so, that people who have not sent young men and women to war in the first person should not be Commander-in-Chief. Warriors are just numbers to anyone who has not been there. To combatants, they are people.

I voted for Obama based on his rhetoric. He said all the right things - and then he reneged on all of them. If you renege in combat, your best buddy will kill you. So in answer to your question, I doubt that anyone running for any office deserves the trust of the public and I believe that 2012 and 2013 will prove that conclusively. Politics has become a game, and the winners are decided by the richest special interests. No politician will dare stand for the citizenry over their corporate donors - and so all politicians are immediately in violation of their oath of office and should be introduced to a gibbet.

That there is no penalty assessed is the fault of a permissive...or simply ignorant...society. 'No child left behind' destroyed the basis of minimum requirements for education. The last college that wanted me to teach told me that I must pass everyone whether they completed the course work or even attended the lectures. I declined. For the barker who does not accept my opinion because I won't present my credentials to him, I say 'Go fish'.

"Money aids trade and societies which attempt to exist without it do not flourish."

Proof? Nevermind. The only relevant society is our current one, and it's global--not because every person participates in the global economy, but because every person's life is impacted by activities performed in the name of that economy, either directly or indirectly.

Regarding the Venus Project and the Resource-Based Economy (RBE) concept, I see them as unnecessary limitations on a vision of the future. I don't think we can predict how 7 billion people will want to invest their time in the future, and we will be working with progressively lower fossil fuel availability than today. It's enough to just get the necessary number of people to agree that using money is a big enough problem (primarily in that it's the basis of so many others) that we end its use. Some people might put more time into developing new technologies, but a PLAN for society as a whole would be even more of a reach. I see Charles Eisenstein's vision of a more spiritual future (see ric2's link to Sacred Economics) as another unnecessarily prescriptive vision.

"If it were merely a useless intermediary, it wouldn't have been invented in the first place."

You might find David Graeber's book, Debt: The First 5,000 Years a good read. Especially the first five and last two chapters.

"Still, it isn't the fault of the money, but of the people - and if it were displaced by another system the same people would exploit it."

Only if the new system involved tracking value. Do you understand that what I'm proposing wouldn't? That it's not really even a system so much as a way of thinking? (I wouldn't even call it an economy, necessarily.) That is, the behaviors of transferring goods and services could continue (with adjustments over time), while the accounting rigamarole could (potentially) be replaced with thinking about why it's not necessary.

"What initiative would anyone have to do anything more than obtain food for the day?"

Enjoyment/pleasure, love/compassion, satisfaction, exercise, social interaction, among others. Why do people do things for no money and which doesn't involve the day's feeding--in other words, volunteer--in today's system? Try picturing a society of retirees, if that helps at all. (I just spoke with my dad, who just turned 73. He was telling me about "working" at the homeless shelter, preparing and serving meals. He and my mom have also helped build houses in Mexico through Habitat For Humanity. People do stuff.)

"How would someone come to own anything?"

First, what everyone owns the day before money use ended, they would own the day after. Beyond that, they would come to own things by obtaining them in similar ways as now, just without the accounting. I get the sense that you're having a hard time imagining that piece. It wouldn't be stealing unless the other person didn't want to give it up. Of course, this assumes the maintenance of manufacturing, production, and supply lines, etc. Some of those would no doubt change over time, perhaps end altogether. Extending the thought experiment to that level can be very instructive, especially around considerations of exploitation and resource depletion (think fisheries, for example.)

"And how could a population of more than a few million survive?

Just like they do now. Get it yet?

"I think the practical nature of such a society would be very like the native American tribes who had no concept of ownership past personal goods."

On its own, that's a fairly innocuous statement, but in the context of your paragraph it's a very unimaginative and anachronistic perspective. We have electricity grids, the internet, radio, cable TV, roads, extremely diverse industries from entertainment to housing construction, hospitals, etc., etc. With regard to ownership, this infrastructure enables diverse services that don't require ownership (have you read Natural Capitalism, by Paul Hawken and the Lovinses?), such as online movies and open source software. (This starts to get into the RBE focus, which, while limited in its vision, still has some validity.) A world without money today would be unlike any past society in many ways.

"So what of people like me in a cashless society?"

You'd be part of the community, and in place of daily financial transactions you'd have personal relationships. Word would go out when you needed help (got a cell phone?), and someone would give you a hand instead of sitting in an office shuffling paper. You might teach youngsters or train adults in a specialized skill. What do you want the rest of your life to entail?

(1)Your parents volunteer because they HAVE MONEY TO buy food and don't have to grow it, Try to imagine them with no money and nothing to barter.

(2) Don't pander - and don't patronize me - or try to. I am at least as smart as you. "Of course, this assumes the maintenance of manufacturing, production, and supply lines, etc. " They would disappear overnight without money to purchase raw materials and pay workers. What are you thinking?

(3) The world has 7 BILLION people. That's different than three million. Capice? "The same way they do now" is sort of funny in a sad way because much of the population has no access to clean water or even food. That's why thousands of people die of starvation every day. THEY CANNOT BUY FOOD.Want a reference? Sure: http://www.worldometers.info/

SCROLL TO THE BOTTOM AND READ IT!

(4) "A world without money today would be unlike any past society in many ways."

Yes. Because everyone would die from the lack of food, water and medical treatment.

(5) "You'd be part of the community, and in place of daily financial transactions you'd have personal relationships. Word would go out when you needed help (got a cell phone?)"

That entire concept is irrational. I have to pay for my cell phone because the provider has to pay for constructing towers and maintenance. When that stops, EVERYTHING STOPS. The 1% is not in the game for kicks and grins. No one in the world is. So unless you intend to kill everyone off - which would be the net and most immediate result of your cockamamie concept - it won't work in the real world. Which is where we live.

We can do an experiment. You and your parents send all of your money to me. You can explain to the IRS and the county assessor why you are no longer paying tax. You can explain to the grocer why you no longer need to pay for food. You can put your ginger in the card slot at the gas station and see how much gas you get. You are talking about another eon on another planet. Maybe if you tried living amongst the people who are here now, you would understand that your idealism is fine - as long as you don't try to put it on anyone else.

Brother, even your parents - who surely love you dearly - won't be willing to participate in this.

Exactly. Maybe that's why you're having such a difficult time considering it. Rationality brought us here to the brink, with all those exploited and starving people you mentioned let to fall by the wayside because doing so was rational.

I'm not patronizing you, I'm inviting you to consider something you've never considered before: a world not based on transactions and valuing and rationality. You don't get it because you were raised to not get it. Get it?

That's just nuts. You are saying that if you want something you can just walk up and take it from whoever has it.

Huh?

Worse, you are blaming an inanimate object, the value of which is subjective, for the crime of being stolen.

No idea what you are talking about here either

Does the concept of rolling the heads of some corrupt bankers and politicians not make more sense?

At this stage in history, that would be a complete waste of time. This is a systemic issue - not a problem with bad individuals. The behaviors of politicians and bankers is not much different than any time in history. The system is inherently corrupt - it's a feature not an aberration

Ilargi calls this a political crisis - which every economic crisis is. Economics is just politics wrapped in complex math.

Do you understand that removing money would also remove 99.9% of the world population's claim to the ownership of anything?

Negatory, Bandit. We reached the brink not through rational constructs, but through unbridled greed.

Now that the politicians have been bought off, no one who stole the money will ever be punished and the 99% will be left to their own devices - which, for the most part, does not include self-sufficiency.

The logical end to this will be a replay of the French Revolution and it will happen sooner rather than later.

Why? Because there is more debt in the global village than there is even POTENTIAL money to pay it. CDS are worthless. So unless EVERY creditor waives EVERY debt - and that would have to happen at the same second or an automatic arbitrage would exist, it can't happen...

And here's news. It won't happen. Nuclear war will happen. An extinction event will happen. But a rational solution to the world's problems never will.

The logical end to this will be a replay of the French Revolution and it will happen sooner rather than later.

This is probably closer to the logical end. Though, I would put it on a scale closer to the type of institutional change akin to the agricultural or industrial revolution though on a much much faster timescale

http://en.wikipedia.org/wiki/World_revolutionWorld revolution is the Marxist concept of overthrowing capitalism in all countries through the conscious revolutionary action of the organized working class. These revolutions would not necessarily occur simultaneously, but where local conditions allowed a revolutionary party to successfully replace bourgeois ownership and rule, and install a workers' state based on social ownership of the means of production.

I must say, it's a bit disheartening that you predict this will happen, yet adamantly refuse to acknowledge the possibility of a world without private ownership of property or "money" as a means of facilitating exchange. I agree with you that it is very unlikely we will rid the world of the concept of "money" as a unit of account, medium of exchange and/or store of value anytime soon. And I also agree that thermonuclear exchange is a distinct threat for humanity in the future, but also a far cry from inevitable. Above all, I believe it is incumbent on us to think of new possibilities for how the world can and will work, rather than imagine the various ways in which it will end.

"Why is easier to imagine the end of the world, than to imagine the end of capitalism"

"..rolling the heads of some corrupt bankers and politicians....would be a complete waste of time."

Dr. T, speaking in specifics rather than abstractions will get you in trouble!Just look at what happened when CHS wandered from his customary mo recently.And if you inadvertently out gloom the local doomers, you will be attacked with convoluted verbiage that would make Derrida's head spin. These comments, of course, do not refer to the commentariat in its entireity.

I am currently traveling in the belly of the beast. Returning to my Island to visit with friends (and speak English :-).

Re Europe

German 6 month bills sold off on Monday for a negative interest rate direct from the sovereign auction. This means that investors are paying the Bundesbank to accept their loans. To say this is unusual would be an understatement. We have seen very short term debt trade in the secondary market in the USA at negative rates in rare instances, but to the best of my knowledge, this is the first time it has happened in an actual sovereign auction. We are seeing a real split now between the "smart" debt market money and dumb equity money, composed to some extent of pension fund managers trying to eek out their 8% ROI. Italian 10 years have been over 7% for a week now.

Re Dr. Tom and Ogardiner - my two cents

This can be a pretty erudite blog site and undoubtedly has had quite a few people on it with various types of graduate degrees which are technically doctorates. Some may have more expertise than others. I have a friend on my island, an astrologer, who recently got a Ph. D. in astrology. Her thesis was on the effect of black holes, dark matter, and dark energy on our every day lives. I am no physicist or astronomer, but the last academic course I took (or will take) was on stellar evolution, including the collapsing of larger supernovas into black holes. So we sat down over a long breakfast at her request while she was doing her dissertation. The bottom line was that I cannot comment on the validity of her dissertation, but I can state that she knew damn little about astrophysics. Dark energy and dark matter are just fudge factors anyway to label unexplainable observation data, but black holes do have a strong theoretical basis. Well, she was awarded her Ph.D. but I still refuse to call her Dr. Kelley.

I will begrudgingly use the Dr. form with people actual practicing physicians if I am a client, mainly in the interest of self preservation, but refuse to use it for any other degree. If people want to dazzle me with their intellect, they may do so by what comes out of their fingers and mouths. Stoneleigh has a host of graduate degrees in various fields including molecular biology and law I believe, but never uses "honorifics." Tom is only the second commenter on TAE in the years I have been here to incorporate a graduate degree title into his ID. As retired military, I imagine he was trained to capture the high ground from the get go and psychologically intimidate the "enemy." And affixing said "honorific" is a good tactical start. From reading several of his comments, I would feel that he actually does hold a Ph. D. of some sort. But, as the old saying goes, when on the internet, you may be conversing with a dog. Anyway, I have learned some interesting things from his comments, though I skimmed through much of his conversation with SteveB. But the style, that often comes from a military or police background, of extreme self-assuredness of ones opinions and regarding that "the battle of opinions" are to be won, is simply not my cup of tea. I avoid social situations whenever possible built on a formal hierarchy of rank, and I regard "Dr. Tom" as an attempt to "pull rank." Since there is a reasonable probability that he retired with the rank of major from the military, perhaps he could be Major Tom.

If one feels compelled to use an academic title here integrated into their ID, I would think it reasonable to introduce yourself with the the exact degree, including department and specialty. As an example, perhaps, Dr. Mengele, medical physician, Angel of Death

"Why is easier to imagine the end of the world, than to imagine the end of capitalism"

Because there are only two fundamental human interactions: force and persuasion. And there are only about three paths to individual ownership:

A king or a Shogun may give land and titles in exchange for loyalty (or 'duty') - that's a method of persuasion. But the king can also remove that land and title - and your life if he chooses. That's the implied force behind the persuasion. And the definition of 'duty' includes a monetary component. You must do your duty or pay your duty.

Or a force or tribe may take land by force and hold it until someone stronger comes along - or they may offer amnesty in exchange for surrender and taxation. Genghis Khan was very successful using the combination of persuasion and force. Still, the combination of force and persuasion result in a 'duty' to be paid. And a penalty if it is not.

Or we can eschew force and establish ownership only by persuasion and lawyers. If you cannot force me to give you my land, you must persuade me in some other way. Typically that is by offering me a barter commodity I can carry around until I can find another home. But I shall have to pay a duty to the local government or chieftain wherever I decide to live or I won't be allowed to live there. If I don't pay my tax...or 'duty' to the proper authorities, they will take my house by force.

If you remove money, you have removed the 'civil' portion...or veneer, if you prefer...of civilization. At that point he who holds the land owns it. But then governments won't work because there is no ready means of taxation to provide services or protect trade routes. So those jobs must go to mercenaries who might well decide to take everything instead of only a portion.

So, for instance, if the police are militarized and begin to kill citizens who are protesting peacefully, and laws are passed which sound innocuous but in fact end-run the Constitutional rights of citizens by saying that in some cases, and no one will tell us exactly what those cases will look like, a citizen may be 'disappeared' for an interminable time without charges by the military because the homeland is now considered a battlefield in law.

If I were a young person I would be terrified instead of only amused as I am now. Because, taken to it's logical conclusion, one sees that when the gravy train runs out the government will deal with civil unrest - not by correcting the problems - but by oppression.

I can be more specific. No weapon has ever been invented that was not eventually used. If you think the US is out of the business of creating nasty biologicals, you are a silly person. If you believe that any country which uses depleted uranium in projectiles is going to stop before they have something better, you are fooling yourself.

Further, if you believe, even for a second, that the US is going to bargain away it's vastly superior nuclear arsenal, or dismantle it's delivery systems, your belief system is flawed.

So the largest economy in the world can barter, but only as long as they have the biggest stick.

By removing money from society, you remove the power of the individual to persuade by peaceful means. You remove the individual's choice of what value to place on goods or services, because in many cases a barterer will have to take the first offer he gets or his perishable crop will go to waste - he doesn't know if he will get a better offer or even get another offer at all.

So growers will immediately stop growing surpluses that they cannot trade by prior agreement. That concept doesn't empower individuals - it empowers huge multinationals which can move crops to diverse markets before spoilage occurs. It removes personal incentive, because there isn't any incentive to be fair. The only incentive is to find ways to cheat the system.

Coincidentally, I was Major Tom as well. Of course it's an attempt to pull rank. Psychology wins the battle. Swords merely formalize it. Sun Tzu and Musashi in turn teach us to win before the battle begins.

My dissertation concerned the effect of eye segmentation in Drosophila melanogaster. It was a 'gimmie' after I disagreed once too often with John Walker regarding causality in his physics program. My career was in forensics.

I discontinued formal education for the first time in my life last year after I cleverly near-amputated (90%) a finger and destroyed a knee working on the farm. I taped the finger back on, but it wasn't even close and I had to have a microvascular surgeon cut it off again and rebuild it. It's better, but....

They did a second arthroscopic partial meniscectomy (I had a previous one for a sports injury in the 90s) but I was thought to be too old to benefit from an ACL repair and that was not done. So I am not going to do any break-dancing or bungee jumping.

Had I not screwed that up and lost a year, I actually intended to finish medical school this year, but I had no plans to pursue an internship or residency at my age. I have been plugging away at it for so long that I thought I'd complete it - but the best laid plans don't work after first contact with the enemy or when a bull head-butts you while you have your hand in the machinery. The failure of the economy would have put me off anyway.

I blog in an attempt to prevent dementia from aging. I am not particularly interested in which side I take and I am not seriously locked to any position or ideology except atheism and self-sufficiency as a form of personal responsibility. Simply being in the opposition is the point of the exercise for me.

I was trying to visualize what Steve was talking about and then it dawned on me (duh!), it is not of this world. No problem now, really neat. The concept has nothing to do with my tomatoes and to whom I might give them or trade then or sell them.

Right now I am building a small hand railing for a man who just had a knee operation. This will help him better get up and down his steps. AFAIK he has nothing I want. If I now had to depend on woodworking to feed my family, he would not get the hand rail because he has no tomatoes and no money to afford it.

When I ask myself, “Why are you doing this?”; the answer becomes obvious. Building a community network may be very important in event of bad times. It is kinda like why I have a hand pump in our well while the electricity is still providing all the water from the well we use. In that sense I am selfish, numeral uno etc, but in another sense I will share our water if the electricity fails. Of course I am giving real water so I would like something real in return. No fiat please, a silver coin will do. ;-)

El G: One of the fellows I flew with had an advanced degree in horticulture of all things. Not only was he a fine pilot but he had the best roses on base:) It seems his dad had a large greenhouse and someday he would take over it‘s operation. You might need a 'reading' some day ... who know?

You have one point that is really important (otherwise all the talk of money disappearing is "silly" to the extreme.) Small communities can run on debt and barter, but as soon as the "stranger" appears as an outsider then some sort of agreed on money-token takes effect.

Now to your Good Point

"So, for instance, if the police are militarized and begin to kill citizens who are protesting peacefully, and laws are passed which sound innocuous but in fact end-run the Constitutional rights of citizens by saying that in some cases, and no one will tell us exactly what those cases will look like, a citizen may be 'disappeared' for an interminable time without charges by the military because the homeland is now considered a battlefield in law."

"If I were a young person I would be terrified instead of only amused as I am now. Because, taken to it's logical conclusion, one sees that when the gravy train runs out the government will deal with civil unrest - not by correcting the problems - but by oppression."

"I can be more specific. No weapon has ever been invented that was not eventually used."

In readind ZH this morning I found this -http://www.zerohedge.com/news/guest-post-ndaa-protests-end-ironic-swarm-arrests

You are so right that civil unrest is delt with by oppresstion. Just look at the crack down on Occupy demonstrations, vigils and encampments. I'm surprised I haven't seen any pictures of clergy being kicked to the ground and zip-tied with arms behind them. Our local Interfaith vigil in Oakland got swept away and the next day swarmed the city hall steps, only to be locked out, but not before a few were permitted to talk to the mayor.

The only thing the council woman told us last night at our Local Business Laison meeting was that permits for vigils needed to be obtained and that giving food to the homeless hungry needs health permits from the County. At least she took notes on the police excesses. So, yeah, this is what peak oil looks like, and post-peak freedom.

And now for your sad assertion: "Because there are only two fundamental human interactions: force and persuasion."

No mother love? - how tragic to be an orphan. Most groups of people I am fortunate to associate with are filled with love and sharing. I am hoping for a decentralized future when the power of the state has gone broke and we can get on with our lives. (Course the death throes may be tragic.)

And the saddest thing is that you are right about our society running on force and persuasion. However you seem to confuse (persuasion) money and Capitalism. I would postit that both China and the US are kinds of State Capitalism (aka fascism). The reason both the left and right in this country are converging in outrage is that there was a time when we had a middle class. That's dwindling each day. The now we see the Emperor's New Clothes for what they are. The rich are getting richer now only by cannibilizing themselves. Note Ash's good post about unfriendly mergers. (Thanks, Ash)

I believe part of the discrepancy between you, SteveB, SA and I (to a somewhat lesser extent) is that you are talking about the history of socioeconomic evolution, namely feudal societies evolving into the capitalist societies, while we are speculating on entirely counter-factual futures (and entirely counter-intuitive, thanks to decades of exacting social/cultural discipline, political illusions and propaganda).

Take the theories of anarcho- communism and anarcho-syndacalism, for example. Only twice has there really existed any society operating from their principles (in Russia and Spain after their respective 20th century revolutions), and both were quickly crushed by the "Communist" parties of those states. In that sense, you do have a point that the human influences of "force and persuasion" make it very difficult to establish and sustain those societies at large scales.

However, that does not mean there is no legitimate reason to wish to exist in such a society, rather than the one we have now, and there is no law of [human] nature that prohibits these societies from existing either.

"Anarchistcommunism (also known as anarcho-communism and occasionally as free communism) is a theory of anarchism which advocates the abolition of the state, markets, money, private property, and capitalism in favor of common ownership of the means of production, direct democracy and a horizontal network of voluntary associations and workers' councils with production and consumption based on the guiding principle: "from each according to his ability, to each according to his need".

Some forms of anarchist communism such as insurrectionary anarchism are strongly influenced by egoism and radical individualism, believing anarcho-communism is the best social system for the realization of individual freedom. Most anarcho-communists view anarcho-communism as a way of reconciling the opposition between the individual and society."

I tried to specifically avoid the word 'capitalism' so that meaning wouldn't be taken.

Love and sharing are methods of persuasion - as is discipline. Theoretically, love and sharing create a positive feedback loop in which the young are taught to care and share.

Discipline inculcates respect, but it shouldn't be physical discipline except in cases where continuation of that activity could cause harm to someone other than the offender. I can get into complex scenarios, but I presume that you understand all sides of that argument.

Together, these form the basis of a functional family unit and a small village or tribe. The catch is to create a caring and sharing attitude but not to let it progress to a 'peace and love at all costs' concept in which people are herded onto cattle cars without protest.

Many studies exist that indicate tit-for-tat is the best strategy to employ and that too little forse or insistance, or too much are detrimental to the aggressor. I don't want to debate it - just as I no longer debate anthropogenic causes of climate fluctuation - it no longer matters.

When 'care and share' no longer works , the next thing up on the scale is tribalism, religion, culture, patriotism or slavery. The concept of belonging still exists, but now strangers can be part of the same group and can be convinced to persuade (or kill) members of other groups.

I am a former combat Marine and a retired Deputy Sheriff/forensic scientist. This appalled me:

"On May 5 at around 9:30 a.m., several teams of Pima County, Ariz., police officers from at least four different police agencies armed with SWAT gear and an armored personnel carrier raided at least four homes as part of what at the time was described as an investigation into alleged marijuana trafficking. One of those homes belonged to 26-year-old Jose Guerena and his wife, Vanessa Guerena. The couple's 4-year-old son was also in the house at the time. Their 6-year-old son was at school.

As the SWAT team forced its way into his home, Guerena, a former Marine who served two tours of duty in Iraq, armed himself with his AR-15 rifle and told his wife and son to hide in a closet. As the officers entered, Guerena confronted them from the far end of a long, dark hallway.

Every one of those officers would have done the same thing that young Marine did: try to protect his family. And the Federal Attorney General didn't even blink.

Then Oakland PD shot another former combat Marine in the head, intentionally, and tossed a flash-bang at his rescuers. Now I grasped that the federal government has exactly no concern for the citizenry.

My oath as a Marine and a Deputy Sheriff was to protect and defend the Constitution and, by inference, the citizens of this country, from just such things as that - yet the Federal Attorney General never blinked.

Then the President started signing laws which effectively give him dictatorial powers and end-run the Constitution by declaring the US mainland to be a combat zone. Wait! The US MAINLAND IS NOT A COMBAT ZONE, UNLESS YOU CONSIDER US CITIZENS TO BE TERRORISTS OR ENEMY COMBATANTS. And the TSA is taught that is exactly what we are considered to be and to treat us as potential terrorists.

Let me tell you something. You now no longer know whether the flight you are boarding, or train or bus is going to Philadelphia or some internment camp. You can't know and you are cowed into submission before you board. It has to stop, but it isn't stopping.

How do we stop it? Individually. Register as independents and pull the plug on the two major political crime families.

Enough is enough. Cops shouldn't be going to the home of five-year-old girls to get overdue library books. SWAT teams from the DEPARTMENT OF EDUCATION should not be kicking doors to look for overdue student loans (they got the wrong house). Unconstitutional means I can fight back. In fact, it means I have a DUTY to resist.

Point taken. I cannot conceptualize such a future society if for no other reason than it lies beyond my 'use by' date. I am not being argumentative - I am merely trying to debate intelligently.

My life has been simplified (or regressed) to the point of day-to day planning - out to maybe a few months or a year, but no farther. I cannot predict the future and I have no guarantee that I won't simply clock-out in my sleep tonight - so my interest is on daily life, and an expectation that 'things' are not going to get better within my event horizon - so I try to make some effort every day to at least keep everything from going bad all at once.

Still, I am an optimist. I believe the glass is half full even though I no longer own it.

it wasn't the megadoom in which you place your confidence, T, that spurred my request for your rose-tinted spectacles - that is perfectly valid as we're de-skilled billions in overshoot and technological maniacs are running the show. seychelles jumped to conclusions about the commentariat's stomach for irredeemable circumstances. rather it was your nostalgic embrace of militant american mythology that caused me to blurt. case in point, you not only voted for Obummer but did so because you thought he was saying all the right things.

Yes, I did vote for him. The alternative was McCain, who by virtue of living in a wooden cage for 7 years is so psychologically damaged that he cannot run a country - and his brilliant choice of a running mate, Wasilla Sal. However, I volunteered that information - no one had to drag it out of me. So trying to use it as ammunition is silly. I could simply say "I was kidding! I actually voted for ______." But I want to debate, not argue years past. The majority of Americans voted for him and he lied to all of them. I wasn't alone - but I can admit a mistake. Except I have no idea where the leadership for the next four years is going to come from. I don't think it exists.

We, as a country, are digressing. Now we get to choose between losers, not winners, and none of them give a damn for us as citizens. The laws have to be changed. 'Citizens United' has to be reversed. The governmental concept that it can outlaw plants, such as marijuana (which I do not use) but allow tobacco and prescription narcotice for anyone who wants them as long as the drug companies get paid is wrong. The idea that people can peek in our windows at night and regulate personal behavior is wrong. The idea that one person's religion must be applied to everyone is wrong.

Criminal activity at any level has to be prosecuted. If ut becomes 'us against them', we will win because we have the 99% - but a lot of good people will die in the process. I hope that doesn't happen, but that's what the government is gearing up for. And a lot of people as well. It will turn out badly.

I am embarrassed to say I don't know. I live on the Big Island, which is several hundred miles from Oahu and Honolulu. I don't go there unless I require a medical procedure because it is like LA and I moved here to get away from LA.

I have no connection to the tourist industry, so I cannot speak intelligently to your question. I can tell you that every penny I have goes to homeless veterans and sometimes they eat and I don't. But I have got several disabled vets off the street and into housing and I can't think of a better way to spend my resources.

They are my family, we of the Viet-Nam era. Surprisingly, many of them get more money from the government than I do from all sources. ( I get nothing from the VA - I never claimed anything).

But usually they cannot moderate their spending, or have problems with alcoholism, and I have to feed them for at least half of every month. Sometimes it gets pretty tight.

Still, we all do what we can and several of them work on one of my farms and sell the produce for their income. I don't take anything from that farm. I only take the fruit of my own lavor and sometimes it isn't enough.

But you haven't lived until you have lived on the edge. It's a remarkable and humbling experience.

T, to be clear i wasn't doing a simple 'dude, i can't believe you voted for obama' thing. it was the 'he said all the right things' bit that got me, as if his imperialist, callous leanings weren't perfectly evident amidst his sanctimonious rhetoric. but nevermind.

the alternative was only mccain if you're a centrist. otherwise the alternative is to adequately respect your vote even if hardly anybody else does. suffice it to say we've all learned a lot since 2008.

i lost last year to a blown knee myself. partial menisectomy. got the acl repaired, though.

thank you for being so 'persuasive' with the homeless vets. :) we've got an awesome homeless guy living across the street in the bug out machine. i'm really pleased she's making herself useful. he lost his tent at the local Occupy camp razing and is truly a dead ringer for the bernard character from 'northern exposure,' for anyone who's familiar with him.

Dude, I voted for Obama because I was desperate for change. He COULD have at least TRIED to do what he promised, but his chief advisor, Valerie Crotchcricket won't let him. Now he is east of all the Repugnicans in the race, so there is no incentive for anyone to vote for anyone except Ron Paul, and he won't win.

Obama will win again unless someone actually gets to see his ginned-up birth certificate and declared him inelegible - but that can't happen. It could happen in a free society, but we are beyond that.

In fact, I am thinking about reporting your al Qaeda leanings and collecting the reward... there IS a reward isn't there? There was for everyone who is still in Gitmo after ten years without charges.

I have looked at the various contributions and I must say that I am astounded. I really thought that the Bolsheviks had laid to rest that particular one. OK, I know, they did not do it quite the way it "should" have been done.

I think that the best I can do it to suggest that some of the cases and writings of Hernando de Soto Polar should be studied. There are lots of countries where title to property and capital is not properly registered - effectively they are outside the monetary system - and where force/persuasion is the only way to keep hold of what should be yours. Here is an example that I am personally familiar with:

According to hawaii.gov, tourism is up over last year, including specifically from Japan.

I am also a Hawaii immigrant, though on a different neighbor island than Dr. T. When TSHTF it is probably the case that the neighbor islands could get by, given their land resources and population. Until the refugees from Oahu arrive.

Following up on your and Ash's comments, my contention is that this would need to be a global decision. Nations or smaller pockets of population trying to do some form of moneyless living would be (and probably have been) incessantly subject to outside force/persuasion because the use of money by those others gives them the incentive to do so.

There is no example to point to from which to learn (unless we wish to learn about tangential matters.) This is a thought experiment on a possible future. It takes some time 'living' there before the realization sinks in that, "Oh, that kind of thing wouldn't happen in that world, because the incentives would be almost entirely absent." And if not absent, then often temporary until reality sets in. For example, why hoard when you can't use it all at once? If you don't eventually use it (during which time others could use what you don't need), it would go to waste. (Note: provisioning is not hoarding.) A learning curve is not an impassible wall.